Malaysian Franchise Act Simplifies Entrance To Market


Kuala Lumpur, Malaysia-Any U.S. company seeking to sellfranchises in Malaysia must write a letter requesting approval fromthe Registrar of Franchise Ministry of Entrepreneur Development,Malaysia, according to Mahadi Mohd Ibrahim, ministryundersecretary.

The letter must include a statement of the company's intentto sell a franchise in Malaysia, as well as information on theproducts, the company and the prospective franchisee. The ministrywill reply within seven days after receiving the letter. No requesthas been rejected since the act was passed.

"This is a significant development for franchise companiesthat want to tap the Malaysian market," said Marcel Portmann,International Franchise Association (IFA) vice president ofemerging markets and global development. "IFA begandiscussions in 1999 with Malaysian officials on behalf of ourmembers for simplification of the registration process, and thoseefforts have paid off with positive results."

Prior to clarification of the act, U.S. companies wishing tosell franchises in Malaysia were required to submit a disclosuredocument, the franchise agreement, the operation manual, thetraining manual, the company's latest audited financialstatements and auditor's report, and any additional informationrequired by the registrar.

"The registration process was extremely complex anddeterred franchise companies from exploring the Malaysianmarket," Portmann said. "Now there is a whole section ofthe global market open to IFA members." -IFAInsider

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