Malaysia Franchise Consultancy - Miraj Consultancy Helps You Expand!

Licensing involves granting permission for the use of intellectual property (IP) to another party. The licensor allows the licensee to utilize trademarks, patents, copyrights, or trade secrets under agreed terms. Licensing agreements outline rights, payments, quality control and restrictions, benefiting both parties by expanding market reach and accessing valuable IP. Compliance with intellectual property laws is essential. Seek legal advice to ensure a proper licensing arrangement.

Franchise is a business arrangement where the franchisor grants the rights to a franchisee to operate a business using their established brand and business model. The franchisee pays fees and receives ongoing support. Franchise agreements include brand usage, business systems and training. Regulations under the Franchise Act 1998 protect both parties. Franchising offers entrepreneurs established brands and support, while franchisors expand their business. Compliance with legal requirements ensures a fair and beneficial franchise relationship.

Franchising involves providing a complete business system, support and ongoing assistance, while licensing typically grants permission to use specific intellectual property (like trademarks or patents) without comprehensive business support or a complete operational system. Franchising often involves a broader array of rights, support and control compared to licensing arrangements.

In order to begin a franchise business, a company should have:

• Franchise Disclosure Document (FDD)
• Franchise Agreement
• Business Registration Certificate:
  Local Company – Companies Commission of Malaysia (SSM) status Sdn. Bhd. 
  Foreign Company – Company Registration Certificate certified by foreign registration body
• Franchise Operation Manual (SOP)
• Franchise Training Manual
• Copy of Intellectual Property Corporation of Malaysia (MyIPO) trademark certificate
• Bankruptcy search results for directors
• Copy of audited financial statement (Latest 3 years – profitable record)
• Prototype Outlet Management Account (Profit/Loss Account) with at least 6 months of operations for each package offered
• Company Profile/Brochure

ROF (Registrar of Franchise) registration should be done at Franchise Development Division, Ministry of Entrepreneur Cooperatives Development (KUSKOP). We can help you to accelerate the process by appointing us as your Franchise Development Partner.

Popular franchising industries in Malaysia include food and beverage, retail, education, beauty and wellness and convenience stores. However, trends can change over time based on market demand and consumer preferences.

Potential franchisors in Malaysia can be found through franchise expos, business networking events, franchise directories, consulting with franchise associations, or seeking guidance from franchise consultants.

Financial considerations include initial franchise fees, ongoing royalties, operational costs, location expenses, marketing fees and potential returns on investment. Conducting thorough financial due diligence is crucial before investing.

Franchise fees in Malaysia can vary widely depending on the brand and industry, typically ranging from tens of thousands to hundreds of thousands of Malaysian Ringgit. Royalties are commonly calculated as a percentage of sales and can range from 3% to 20% or more, depending on the franchise type and agreement.

The timeline to set up a franchise in Malaysia varies based on factors like location, industry, and franchisor requirements but can typically range from a few months to few years.

Factors to consider include the brand reputation, profitability, demand for the product or service, support from the franchisor, contractual terms, and the potential for growth and scalability.