Malaysian Franchise Act Simplifies Entrance To Market


Kuala Lumpur, Malaysia-Any U.S. company seeking to sell franchises in Malaysia must write a letter requesting approval from the Registrar of Franchise Ministry of Entrepreneur Development, Malaysia, according to Mahadi Mohd Ibrahim, ministry undersecretary.

The letter must include a statement of the company's intent to sell a franchise in Malaysia, as well as information on the products, the company and the prospective franchisee. The ministry will reply within seven days after receiving the letter. No request has been rejected since the act was passed.

"This is a significant development for franchise companies that want to tap the Malaysian market," said Marcel Portmann, International Franchise Association (IFA) vice president of emerging markets and global development. "IFA began discussions in 1999 with Malaysian officials on behalf of our members for simplification of the registration process, and those efforts have paid off with positive results."

Prior to clarification of the act, U.S. companies wishing to sell franchises in Malaysia were required to submit a disclosure document, the franchise agreement, the operation manual, the training manual, the company's latest audited financial statements and auditor's report, and any additional information required by the registrar.

"The registration process was extremely complex and deterred franchise companies from exploring the Malaysian market," Portmann said. "Now there is a whole section of the global market open to IFA members." -IFA Insider