Premium Essay

Franchise Act

In: Business and Management

Submitted By fredc
Words 3358
Pages 14
Franchising Law in Malaysia
A comprehensive analysis of the Franchise Act Introduction
1. The business of franchising has transformed the face of most business practices in Malaysia and has become a revolutionary way for Malaysian companies to develop, increase their production capability and expand their distribution chain both vertically and horizontally. Franchising fosters business opportunities for Malaysian franchisees, particularly small start-up companies (the “Franchisee”) under the guidance and assistance of another company (the “Franchisor”), which has the requisite experience and knowledge of the market practice and industry. The Franchisee may leverage on the Franchisor’s international and/or regional reputation and goodwill through its use of the Franchisor’s trade marks and intellectual property rights as well as the Franchisor’s tested technologies, trade secrets and business systems. Before the enactment of the Franchise Act 1998 (the “Franchise Act”) on 8 October 1998, franchising in Malaysia was governed by contractual principles and the absence of complex statutory provisions or guidelines allowed parties to freely negotiate the terms of their franchising arrangement. In contrast, the Franchise Act highly regulates the franchising industry as it not only controls the terms of any franchise agreement but also implements a systematic scheme of registration for the Franchisor, Franchisee and franchise brokers. Although this has created a regimented legal structure for the franchising industry in Malaysia, the Franchise Act brings with it certainty and greater protection for Malaysian businesses, particularly the small medium businesses.

Elements of a Franchise
2. Principally, the Franchise Act applies to the sale of any franchise in Malaysia whereby the franchised business operates in Malaysia. A “franchise” falls within the...

Similar Documents

Free Essay

Joan Holtz

...provided and distributed to customers for ready consumption 2. Retainer Fee The amount of revenue to be counted in 2010 is $5,000 from the $10,000 retainer fee good for 1 year. This is because, despite the fact that there was no way of knowing how often, or when, the client would request advice, the fee is paying for the certainty of the law firm’s availability and expertise at any point where these are needed by the client. The delivery of this “service” lapses each month in proportion to the total amount of paid fees hence $5,000 should be recognized by the end of 2010. 3. Cruise The amount of revenues that Raymond’s Travel Agency should record in 2010 is $260,000. The service that the travel agency provides is in the act of booking related travel services – accommodations, transportation, coordination in behalf of clients, etc – as opposed to delivering these same services per se. Since Raymond’s completed the above while still within 2010, revenues should already be recognized. 2011 refunds would not have an impact on revenue recognition as this should already represent a loss to Raymond’s, though certain stipulations in the company’s reservation policy should eliminate such possibilities or aid in mitigating adverse impacts to profits. 4. Accretion The nursery owner should not recognize any revenue in 2010 as (1) under the delivery method, the Christmas Trees have not actually been purchased by customers and have not subsequently been......

Words: 895 - Pages: 4

Premium Essay

Tijuana Flats Entry Into Global Market

...Entry Strategy Australia has nearly 1,200 franchise systems, with more franchising outlets per capita than the United States, and has been referred to as the “Franchising Capital of the World”. For many Australians, owning and operating their own business is a lifelong dream, and franchising is a relatively low-risk way to achieve this goal. This form of business is fast-growing, and more than 400,000 Australians are employed as a result of franchising (Vucic). Since 2010, franchising has grown by 15%, which can be attributed to the enactment of specific and compulsory legislation that governs franchise relationships (Baybridge). There are different forms of foreign franchising in this Australia; however, we believe direct franchising is the best option because it provides ultimate control of the franchise network as the two parties involved will have a direct relationship. It also allows for the direct supply of products or allowances made to source own supply. Cultural barriers will have to be worked out to provide adequate training and a third party advisor can help with local customs and commercial practices (Baybridge). Australia has many channels of support for this form of business as more and more companies emerge that aide in franchisee training, franchise system development, public relations and marketing (Vusic). The Franchise Council of Australia provides key aspects of franchise decision making, management, and practices from experts in their field (FCA). ......

Words: 2118 - Pages: 9

Premium Essay

Gold Star Chili

...disturbing fact for some students who are overly focused on getting the “right answer”) some issues for discussion would seem obvious. Customer and Market Focus Strengths • Gold Star has segmented its customers into three groups -- franchisees, restaurant customers, and retail customers. They have carefully defined the characteristics of each. • To learn from customers, the company relies on face-to-face contacts, focus groups, customer comment cards, customer surveys, and structured meetings. Each of these is tailored to meeting the need of franchisees at various stages of growth of the franchise. Some of these include: - Geo-demographic analysis of locations prior to building - Use of Franchise Service Representatives (FSR’s) to stay in touch with franchisees and their needs when placing orders - Opportunities to listen and learn through regular franchise meeting and training sessions - Regular comprehensive surveys using questionnaires • Evaluation of product and service features takes place through formal and informal means, such as: - Informal determination of product and service features through quarterly and semi-annual meetings, daily and weekly phone calls to FSR’s, and discussions with delivery personnel. - Store managers’ contacts and discussion with “regular” customers - Annual telephone surveys by a marketing consultant of 330 “heavy chili users” • Evaluation of listening and learning processes, both internally and as a......

Words: 503 - Pages: 3

Premium Essay

Business Law 320 Final Paper

...Louis causes. If strict liability is not available, Mary must show evidence of Jean having the animals and proof of her injuries. She would be showing negligence of caring for the animals. Having such animals that are harming people is negligent or lack of due care to others and the community. Question 2 The pitfall that Caffeine would endear if exercising too much control is product liability and may be held liable under the doctrine respondeat superior for the acts of the franchisees’ employees. Too much control would be telling the franchisee where the business should be located and to hire, or how to run the day-to-day operations. Day-to-day operations are usually left up to the franchisee to decide, unless otherwise specified in the contract. Generally, the franchisor will provide some supervision and control to protect the name and reputation, such as food and products being the same. Caffeine is a chain-style business operation. This is important because under this business style franchises are...

Words: 637 - Pages: 3

Free Essay

Case Study

...Case Study: Franchise Strategic Planning [pic] As one of the world's largest graphic communications franchises, Allegra Network LLC enjoys an enviable vantage point for spotting trends and opportunities in the print industry. "Our job at headquarters is to provide our franchise members with tools, processes, and outsourced services that increase their profits," says Tim Wood, vice president of technology for Allegra Network. [pic] Founded in 1976 in Michigan, Allegra Network LLC has grown to support more than 600 locations in the United States, Canada, and Japan, and its sales rank in the top 200 among all franchises of any industry worldwide. The franchise includes six leading brands in its printing division—Allegra Print & Imaging, American Speedy Printing, Instant Copy, Insty-Prints, Speedy Printing, and Zippy Print—as well as the Signs Now brand in its signs division. Locations offer full-color printing, graphic design services and electronic publishing, digital color copying, high-speed copying, and online file transfer. What sets Allegra Network apart is the company's extraordinary commitment to franchise training, technology implementation, and store profitability. Franchisees are attracted by the company's Profit Mastery Program, which includes advanced training; an annual benchmarking study for profitability called the Operating Ratio Study; and Performance Groups of about six franchise owners who act like a board of directors, advising each other on......

Words: 903 - Pages: 4

Premium Essay

Laws and Regulations for Business in Uk

...By law any registered place of business is obliged to pay business rates. Public liability insurance (PLI); this will cover a business from financial loss in the events of accidental bodily injury or damage to the property of a third party individual (external customer). If PLI premiums are not paid a business could be at risk of a member from the public taking legal action. The food standard agency has written out guidelines that catering businesses need to follow and comply with in order to meet the terms of ‘The food Safety Act 1990’. This Act also falls into General Food Law Regulation from 2004. The food Safety Act 1990 states that all food businesses must maintain food preparation in a controlled and managed way so that food intended for human consumption is rendered as safe. Further aspects recommended include; Fire safety, health and safety, licensing i.e. alcohol, food preparation, contents/buildings insurance and the National minimum wage Act. The legal form of a sole trader is run by one proprietor only. This legal form is the simplest to set...

Words: 814 - Pages: 4

Premium Essay

Starting and Managing a Business

...BUS357 Starting and Managing a Business Assignment 2 – Group based Assignment January 2013 Presentation 1. Executive Summary This document proposes the feasibility of opening a new Pet Lovers Centre Franchise outlet at the proposed recreational hub at the site of the former Parkland Golf Range in 2014. We see a need for more pet friendly facilities at East Coast Park and we believe that of all the pet franchises operating locally, Pet Lovers Centre has the most compatible business practices and values with our intended business. With steady growth in both the pet population and pet product sales in Singapore, we are targeting the middle class segment primarily, with products priced between $1, up to $500. Our main focus is on dog owners who enjoy bringing their dogs out to play at the beach or park. With an existing market share of 49.7 percent, Pet Lovers Centre is well positioned to benefit from the increased exposure towards pet activities once the hub opens. Our financial projections show that the project will be financially feasible with gross profits of about $300,000 annually, and net income of about $100,000 each year. Our monthly breakeven point requires us to sell roughly 67 units of pet accessories with an average worth of $150, as well as 53 grooming and training appointments worth $350 per session to meet costs monthly. Our estimated starting capital required is $300,000, 50% of which will come from shareholders as equity......

Words: 4842 - Pages: 20

Premium Essay

Acc291 Wk.5 Ind. Ass. Behavior Artical

...Behavior Article Analysis Terra Postelle ACC/291 January 08, 2013 Bennie Clark Effect of Unethical Behavior Article Analysis The effects of the Sarbanes-Oxley Act of 2002 on financial statements are general guidelines as to how the information is gathered, calculated and presented to clients while enforcing their accuracy and legitimacy. Companies such as Enron, Tyco, Global Crossing, and WorldCom are just a few examples of corrupt business cultures, practices, and greed that made the need for new laws to arise in order to prevent future business taking the same direction. These companies and companies like them manipulated, lied, embezzled, and sometimes flat out stole from their clients plummeted into financial hardship and in some cases the economy as well. There will always be companies such as, The Brooke Corporation, who will purposefully manipulate financial data or find new loop holes through the SOX guidelines and laws to make a bigger profit. Corporations and businesses such as these do not look at the ethics behind their decisions, but their business’s financial well-being and their own pockets. In the article, Eight Years After The Fact Is SOX Working? A Look At Brooke Corporation, Brooke Corporation would sell insurance and related services through franchises. When an “Agent” would purchase a franchise Brooke Corporation would allow the use of their business model, registered trade name, access to the products of insurance company suppliers, advertising......

Words: 605 - Pages: 3

Premium Essay

Mountain Chocolate Factory Inc

...1. Introduction The establishment of Rocky Mountain Chocolate Factory Ico. (RMCF), was in 1982 as a public offering business. It had a global focus and was able to insert itself within the Canadian society and the United Arab Emirates community. Its main activity is within the confectionery industry. The Board of Directors (BoD) has kept its vision and contributed to the success of the business and has carried it to higher levels of efficiency. The innovative capacity of its personnel has given new stands to the business. Its master who design and develops the chocolate mix has been able to continue its fascinating creativity. As the discussion is taken we shall understand the success and also the needs of RMCF. a. Statement problem The Rocky Mountain Chocolate Factory Inc. to address in its continued expansionary growth needs to attend the following as its problem: “impact primary franchisees within continental USA and rest of the world, imminent product patenting, employees’ union agreement and increasing one impact product every year to increase customers’ satisfaction”. 2. Analysis As the case study for RMCF is analyzed; a business engrossed in the confectionery industry, where from year to year there are new entrants to challenge market share and embed in an industry which is proving vibrant and demanding. Based on such facts lets analyze it through a SWOT study. First let’s analyze two factors (Strengths and Weaknesses): Strengths: 1. “The candy......

Words: 3380 - Pages: 14

Premium Essay


...Subway case study | Subway and the challenges of franchising in China | | ADVANTAGES AND BEST ENTRY STRATEGY OF SUBWAY | | | SUBWAY AND THE CHALLENGES OF FRANCHISHING IN CHINA Question: - What are the advantages of franchising in China from Jim Bryant’s perspective? From Subways perspective, is franchising the best entry strategy for China and why? Answer: - “Subway is a very big firm and to spread its business with franchises. To enter in China it was the best way. It is the best way of licensing and entry in a new country. In this company has given a trademark fro their promotion and training.” (International Business Environment and operations 11th Edition, 2009). 1. Entry with franchisee system:- Before subway enter in the China market the franchises system was not so much famous. But because of this system any company only open one store and after that they can go for many stores. So, because of this system it is difficult to attract more customers. But China wanted to know about this system because they also want to expend some of their companies they allow to subway enter to the China by this way. The subways choose to enter in China by this way and they were able to open their many branches in the China market. It is not only save their time, but also have some good effect in the the favour of Subway. Now more and more people know about Subway. They also know how to promote their product. 2. Low cost: - The other advantage was that......

Words: 654 - Pages: 3

Premium Essay

Tim Horton's

...A) Type of business strategy: Tim Horton’s: Low-Cost Provider Strategy Broad Differentiation Strategy Starbucks: The Focused Differentiation Strategy Best-Cost Provider Strategy B) MVV Statements Tim Horton’s • Mission: “[Their] guiding mission is to deliver superior quality products and services for [their] guests and communities through leadership, innovation, and partnerships.” • Vision: ‘[Their] vision is to be the quality leader in everything [they] do.” • Values: “At Tim Horton’s we are making a true difference for individuals, communities and the planet, everyday” “Tim Horton’s is proud to support local community initiatives that make a difference.” For example, o Free swimming/skating; timbits minor sports; community clean ups; earn-a-bike program; smile cookie program; The Tim Horton Children’s Foundation. o Sponsorships; National Sponsorships; Environmental Stewardship; Aboriginal Relations; Animal Welfare; Tim Horton’s Coffee Partnership. Starbucks: • Mission: “To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.” • Vision: Starbucks vision is “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” • Values: “Starbucks Shared Planet is [their] commitment to doing business responsibly. Working to promote a better way of helping each other and the planet – by inspiring [their] customers and......

Words: 1199 - Pages: 5

Premium Essay

The Expert

...year and wants a new identity, they still have a long way to go, but this week is huge in their race for their division. Dallas Empire is a veteran team who finds ways to win. I think Doom will find away this week. Next week we have Necks vs. DPT. The Roughnecks are a team that seems to keep winning, and are a force to reckon with when healthy. DPT suffered their first loss of the season and the board has not been nearly as exciting since the lost. I think they are concentrating on beating every opponent and getting back to the Championship. I think DPT will make sure the board will not have anything to say after this week. Last but not least Franchise vs. Rollers, last year game The Rollers beat Franchise in a dominating fashion. Rollers have all the talent to win every game, but have to make better decisions. The Franchise have looked consistent all year and play smash football. I...

Words: 692 - Pages: 3

Premium Essay

Subway®, Type of Business

...Type of Business Subway® The main activities of Subway® are that they sell mainly sandwiches to their customer to fulfil the customers need for food. The Subway® franchise began in the USA in 1965 and now has 32,774 outlets in 91 countries, also in most years 70% of new Subway® franchises are sold to existing Subway® owners. Subway® is owned in a private sector, as the business started as a partnership between Fred DeLuca & Dr. Peter Buck and they opened three stores before the Subway® outlet began franchising. Subway® what to make a profit, as when the business first opened it was so that Fred DeLuca could pay for his university tuition, and the partnership turn the business to a franchises so that others could succeed in their own business venture. The industry sector that Subway® is tertiary as they sell mainly sandwiches to people that use the business. Products Subway® has a low fat menu which is popular with customers all around the world, and Subway® allows their customers to add the ingredients that they what into their sub, also other product includes drinks & snacks. The subs, snacks & drinks can be combined together into one deal to give their customers a cheaper offer on their products. Purpose The reason that Subway® exist is that Fred DeLuca was looking for a way to make enough money to pay for his university tuition and the solution came at a BBQ during a conversation with a family friend, Dr. Peter Buck, who suggested to Fred that he......

Words: 477 - Pages: 2

Premium Essay


...Executive Summary EasyInternetcafe was launched in the late 1990’s by entrepreneur Stelios Haji-loannou as part of the Internet boom, under the umbrella of the easyGroup companies. Originally called easyEverything, Stelios in October 2001 changed the name to easyInternetcafe. The mission of easyInternetcafe is to provide customers with access to the internet at the lowest possible cost. Despite the support and recognition from the public easyInternetcafe is currently experiencing lost profits and is on the verge of having the company be terminated all together. The original concept of the cafes was to have large stand-alone cafes with 250-600 PCs per store. After the initial internet boom phased out a decrease in profits and loss business was happening. A required re-structure of the company is required in order to keep the company operating. Currently smaller franchised stores are operating with 20-30 PCs and no staff onsite except for regular maintenance. With less involvement in store operations easyInternetcafe is able to concentrate on activities of outsourcing all non-core management activities. Some of the issues easyInternetecafe is currently experiencing are having locations operate with too many PCs for the amount of business, and having no real strategic operating plan in place for new franchise’s that are opening. Four alternatives are taken into consideration to help reduce overall costs and to help the business become successful. Through research on all...

Words: 1558 - Pages: 7

Free Essay

Week 2 Homework Business

...Sport Franchises and Tariffs on Imported Goods Devry University Sport Franchises and Tariffs on Imported Goods page 1 A cultural factor that a sports franchise must overcome is managing and ownership.This includes acquiring a sponsor or sponsors that can pay the players good salary and help build the talents of the younger generation in competition.Alot of sponsors have failed in the past due to poor financial management and embezzling of managers funds(Eitzen,1999). Sports are activities that include encompassing competitions like the Olympics.They also include other activities such as basketball,football,skiing and other recreational activities.The cultural practices have affected the popularity of the nations sports capacity in the United States over the years.The professional leagues of sport's clubs are organized in sport franchise and the league has the role of overcoming cultural practices. Some products of sport franchise include jerseys,shirts and coats with team logos,mugs and cups with team logos,license plates with team names,blankets with team name and logos,and etc.One way to ensure the product sells in the international market is by building a strong team that wins several competitions.When a team is successful,the share of the club increases in the share market and the club can sell a lot of its products which are profitable both locally and professionally(MacCambridge,1997). Another way for sport franchise to ensure their products......

Words: 426 - Pages: 2