Malaysian franchise sales were forecast to climb from RM14.65 billion in 2020 to RM22.66 billion in 2025, a projection reported by The Star. For anyone weighing whether to buy into a franchise rather than build a brand from nothing, that figure is the pitch: proven systems, brand recognition and customers who already trust the name.
The pitch comes with rules. Every franchise in the country falls under the Franchise Act 1998, which the Franchise (Amendment) Act 2020 tightened. The main changes took effect on 28 April 2022.
What the law requires
The act spells out what each side owes the other. A franchisor must give the franchisee the right to use the trademarks, trade names and intellectual property tied to the business, and must keep supporting the operation with materials, operations manuals, training and marketing. In return, the franchisor is entitled to keep control over how the franchisee runs the outlet, so the brand looks the same everywhere. Franchisees may have to pay a franchise fee or ongoing royalties.
The 2022 amendments added two practical requirements. Registered franchises must renew their registration every 5 years, and franchisors must display the registration certificate prominently at their premises. Trademarks and other intellectual property also need to be registered with MyIPO before anyone signs an agreement.
Before signing
Money comes first. Food and beverage franchises usually carry medium to high startup costs. Gyms and fitness centres often need RM1M or more. Service and education franchises, Kumon among them, are cheaper to get into.
Location matters as much as capital. Buyers are advised to check population density, visibility and accessibility of a site, and to find out whether the area already has too many outlets of similar brands. Knowing the local customer is also described as critical to an outlet’s success.
Then there is the contract. Vague clauses and grey areas can hurt long-term operations, and a legal expert should read the agreement before it is signed, particularly against the new certificate display and five-year renewal rules.
Prospective buyers can start by searching for franchise opportunities in Malaysia and visiting brand websites for franchise pages or inquiry forms, or by contacting brands they admire directly. Platforms such as iFranchise Malaysia let users compare investment levels, requirements and sectors in one place.
Sources
Sources
- Malaysia's franchise sales projected to increase to RM22.66 bln in…
- Franchises In Malaysia | Explore opportunities and setting up
