franchise

BGA Management Series: Licensing & Franchising – The Good, The Bad and The Ugly!

This is an introductory workshop for Cafe Owners and Potential Cafe owners to learn more about Licensing and Franchising in ways that they can better protect their investment and interest as well as to expand their business. You will learn:

– The basic franchise and licensing laws of Malaysia
– Introduction to Malaysia Franchise Laws
– Registration of a franchise
– Franchise Agreement
– Repercussions
– Common mistakes in franchising agreements
– Expansion through methods other than franchise
– Licensing v Franchising

Maximum 20 participants only. Please register with Sarah Joy at hello@baristaguildasia.com by 31st August 2013

Per Person : RM70 per person

Inclusive of Refreshment and Coffee.
Note: no refunds or transferring once confirmed.

More information please visit Barista Guild Asia’s Facebook page.

Can a franchise agreement be executed before the registration of the franchise in Malaysia?

In a recent High Court case, the Court held that a licence agreement can qualify as a franchise agreement and a licensor cannot offer to sell or provide a franchise until his franchise is registered in Malaysia.

Munafya Sdn Bhd v Profquaz Sdn Bhd

The Defendant operates an Islamic education system or syllabus for preschool children under the name Children Islamic Center (CIC). CIC is a franchise registered with the Ministry of Domestic Trade, Cooperative and Consumerism (“MDTCC”) and also with the Ministry of Education (“MoE”) (collectively referred as the “Ministries”).

Before the said registrations with Ministries, the Defendant entered into a licence agreement granting the Plaintiff the right to operate the CIC.

After the necessary preparation was done, the Plaintiff discovered that CIC was not registered with the Private Education Division of the MoE. The Plaintiff demand proof of registration but the Defendant failed to do so. However, the Defendant subsequently took steps to register CIC with the Ministries. Before the grant of the registrations, the Plaintiff terminated the agreement and demanded for, among others, a refund of RM35,000.

In allowing the Plaintiff’s claim, the High Court held that, among others:-

1. Notwithstanding that the agreement is in essence a licence agreement and the word “franchise” is not pleaded, the Malaysian Franchise Act 1998 is applicable. Under s. 6(1) of the said act, a franchisor shall register his franchise with the Franchise Registrar before he can make an offer to sell the franchise to any person.

2. In view that the Defendant had failed to register its CIC franchise with the Ministries before the signing of the licence agreement, the Defendant cannot offer or give the CIC licence to the Plaintiff. Therefore, the Plaintiff’s termination is not premature.

The judgement can be downloaded by clicking on the “Pay with a Tweet or Facebook” button below.

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