🇲🇾 Malaysia · reviewed 2026-10-09
Franchise law and registration in Malaysia
Malaysia regulates franchising end to end. The Franchise Act 1998, amended in 2022, sets who may franchise, what they disclose, what the contract must say and what happens if they skip a step. Foreign franchisors face one extra gate: approval before any sale.
The Act and the Registrar
- Malaysia has a franchise statute, the Franchise Act 1998 (Act 590). The Franchise (Amendment) Act 2020 came into force on 28 April 2022. Secondary · Christopher & Lee Ong, Franchise (Amendment) Act 2020, 2022-05-22
- The Registrar of Franchises now sits in the Ministry of Entrepreneur and Cooperatives Development (KUSKOP), and registration runs on its MyFEX 2.0 system. Official · KUSKOP (Registrar of Franchises, MyFEX 2.0)
Who registers, and when
- A foreign franchisor needs the Registrar's prior approval under section 54 before selling a franchise in Malaysia or to a Malaysian, then registers under section 6. The registration requirements are now the same as for local franchisors. Secondary · Rahmat Lim & Partners, 2022-12-05Secondary · Christopher & Lee Ong, Franchise (Amendment) Act 2020, 2022-05-22
- A franchisee of a foreign franchisor must register before starting business (section 6A); a franchisee of a local franchisor or master franchisee must register within 14 days of signing (section 6B). Registrations last five years and are renewable. Secondary · Christopher & Lee Ong, Franchise (Amendment) Act 2020, 2022-05-22
- The section 6 registration file includes the disclosure document, operations and training manuals in Bahasa Malaysia and English, three years of audited accounts, a five-year cash-flow projection, photos of a prototype outlet run for at least six months, trademark certificates and the basis for the franchise fee, royalty and advertising fee. Official · MIDA, Distributive Trade booklet, 2023-11-01
Disclosure and contract terms
- The franchisor must give the prospective franchisee the agreement and the Registrar-approved disclosure document at least 10 days before signing, together with the latest three years of audited accounts. Secondary · AmCham Malaysia
- Every agreement must include a cooling-off period of at least seven working days, and leaving it out is an offence. The minimum term is five years. Secondary · Christopher & Lee Ong, Franchise (Amendment) Act 2020, 2022-05-22Secondary · D&H, amended Franchise Act
- The franchisee must give written guarantees that it and its employees will not run a similar business during the term and for two years after it ends (section 27(1)). Secondary · D&H, amended Franchise Act
Penalties and annual reporting
- Operating without registration is an offence under section 6(2): a company faces a fine of up to RM250,000 (RM500,000 for a repeat offence), and an individual up to RM100,000 and/or one year in prison. Secondary · Christopher & Lee Ong, Franchise (Amendment) Act 2020, 2022-05-22Secondary · Skrine on the Amendment Act, 2022-06-08
- A registered franchisor or master franchisee files an annual report on Form BAF 6 within six months of its financial year-end, including the outlet list, the latest disclosure document and audited accounts. Official · MIDA, Distributive Trade booklet, 2023-11-01
More on Malaysia
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