Licensing
Difference between Licensing and Franchising in Malaysia
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Difference between Licensing and Franchising in Malaysia
Unlike other jurisdiction where granting a license is more or less the same as granting a franchise. However, in Malaysia, these are govern under two different statutory instruments. Franchise in Malaysia has a higher and stringent requirements, and Franchisor must able to fulfill these requirements in order to be able to grant or sell a Franchise. The table below summarizes the key differences
| LICENSING | FRANCHISING |
| Regulated by Contracts Act 1950 | Regulated by Franchise 1998 |
| Goodwill basis | IP must be registered |
| No financial requirement | Need to produce 3 profitable fiscal year |
| Better Flexibility with Licensees | Must be Consistent with all Franchisees |
| No disclosure requirement | Maximum Disclosure |
| Agreement need only be stamped | Franchise must be registered |
| Unable to restrain Licensee from future independent trade upon termination | Restrain Franchisee from future independent trade for 2 years upon termination |
Difference between Licensing and Franchising in Malaysia
Unlike other jurisdiction where granting a license is more or less the same as granting a franchise. However, in Malaysia, these are govern under two different statutory instruments. Franchise in Malaysia has a higher and stringent requirements, and Franchisor must able to fulfill these requirements in order to be able to grant or sell a Franchise.
- Regulated by Contracts Act 1950
- Goodwill basis
- No financial requirement
- Better Flexibility with Licensees
- No disclosure requirement
- Agreement need only be stamped
- Unable to restrain Licensee from future independent trade upon termination
- Regulated by Franchise 1998
- IP must be registered
- Need to produce 3 profitable fiscal year
- Must be Consistent with all Franchisees
- Maximum Disclosure
- Franchise must be registered
- Restrain Franchisee from future independent trade for 2 years upon termination
