Which is required for the success of the organisation in the development of the businesses prototypes and management system. Working closely with our clients, we convert their successful prototypes into viable Franchising or Licensing packages – from the drafting of their Franchise / License agreements, to the painstaking documentation of their operational and training procedures in order to produce Franchisee-friendly operational and training manuals.
We assist owners to identify suitable expansion methods
Which is required for the success of the organisation in the development of the businesses prototypes and management system. Working closely with our clients, we convert their successful prototypes into viable Franchising or Licensing packages – from the drafting of their Franchise / License agreements, to the painstaking documentation of their operational and training procedures in order to produce Franchisee-friendly operational and training manuals.
The Difference between Franchising and Licensing
Franchising
Complete business package (including technical know-how) will be shared with the franchisee.
Continued assistance and guidance must be provided by the franchisor to the franchisee.
Bounded by the Franchise Act 1998.
A Franchise agreement has to be at least five years long.
Compulsory to register a franchise.
Only available to business that have been operating as a Sdn Bhd for at least three years.
A stringent franchisee selection process is usually done.
Trademark filing is required.
Licensing
Only brand name will be shared with the licensee.
Only the technical/product knowledge training will be given at the beginning by the licensor and then it is up to the license to run the business on his own.
Governed by the Contract Law.
A licensing agreement generally lasts less than five years.
Recordal of license agreement (advisable)
Sole proprietors can also opt for licensing.
The licensee selection process is usually less stringent than the one done for franchisee.
Not necessary to secure a registered trademark™.
Grow your business smartly
That is why it is no surprise that Franchising is a favourite ultimatum for business owners to expand their businesses. It has been used by many successful businesses as a powerful tool to leverage their businesses and to penetrate the market with lesser capital investment and effort.
Our Satisfied Clients
Frequent Asked Questions
What is Franchising?
Franchising is a method of expanding your business by licensing your intellectual property rights such as trade mark or trade name to a franchisee who pays you a certain amounts of fee to operate the business using your specific business system or know how at a specified period of time. The franchisee shall conduct its business operations in accordance with proven standards and specifications that have been well established.
What are the advantages of Franchising to a Franchisor?
The advantages are:
- Franchising will allow you to expand your business without expending significant capital per unit.
- Franchising also allows you to grow your business at a more rapid pace than you would generally be able to do on your own.
- Franchising reduces your exposure to risks relating to signing leases, additional financing and vicarious liability for employee acts.
Is the registration of a franchise compulsory?
Yes, the registration of Franchise is compulsory by virtue of Section 6(2) of the Franchise Act 1998. The section provides that all franchises must be registered with the Registrar of Franchise before the Franchisor can offer to sell it in or outside Malaysia. Failure to comply with this provision is an offence under the Act.
What is licensing?
Licensing is one of the most popular methods of business leveraging strategies after Franchising. In general, Licensing is a permission given by the licensor or authorize the licensee the legal rights to use the brand name, logo, product, technology, inventions and/or works of expression for commercial purposes, sparing the license from a claim of infringement brought by the licensor.
What are the benefits of Licensing for Licensors?
There are many benefits, among others are:
- increase the brand presence at retail or distribution outlet
- create further brand awareness to support the core products or services
- support and enhance the core values by associations with the licensed products/service or category (e.g. association with a healthy food product)
- enter new markets (consumer or geographical) which were unfeasible via its own resources or capabilities
- generate new revenue streams, with little involvement or additional financial or other resource implications
Is the licensor required to register his licensing with the government of Malaysia?
No, so far there is no such provision of law required the licensor to do so in Malaysia.
Not sure which method suits your business expansion?
