Licensing
Expert IP Licensing Solutions & Agreements in Malaysia
Licensing vs Franchising
In most countries, licensing and franchising are treated similarly. However, in Malaysia, they are governed under separate laws and have distinct legal and operational requirements.
Key Differences Between Licensing and Franchising in Malaysia
| Aspect | Licensing in Malaysia | Franchising in Malaysia |
|---|---|---|
| Legal Framework | Contracts Act 1950 | Franchise Act 1998 |
| IP Requirement | Based on goodwill; IP registration is not mandatory | IP must be registered |
| Financial Criteria | No financial requirement | Franchisor must show 3 years of profitable operations |
| Operational Flexibility | More flexibility in dealing with licensees | Must maintain consistency across all franchisees |
| Disclosure Obligation | No disclosure required | Full disclosure required before granting the franchise |
| Agreement Formalities | License agreement must be stamped | Franchise agreement and related documentation must be registered with the Franchise Registry |
| Post-Termination Clause | Cannot prevent licensee from future independent trade | Franchisee restricted from similar trade for 2 years post-termination |