Introduction to Franchise

What Is Franchise?

Franchise is a method of marketing and distributing based on a two parties relationship; that is the franchisor (the owner and granter of right) and the franchisee (recipient of right).


Some Of The Commonly Used Terms Are:


The person or company that gets the right from the franchisor to do business under the franchisor’s trademark or trade name.


A method of business expansion characterized by a trademark license, payment of fees, and significant assistance and/or control.


The regular payment made by the franchisee to the franchisor, usually based on a percentage of the franchisee’s gross sales.


A license that describes the relationship between the franchisor and franchisee including use of trademarks, fees, support and control.

Franchise Agreement

The legal, written contract between the franchisor and franchisee which tells each party what each is supposed to do.


The person or company that grants the franchisee the right to do business under their trademark or trade name.

Product Distribution Franchisee

A franchise where the franchisee simply sells the franchisor’s products without using the franchisor’s method of conducting business

Franchise matters in Malaysia is governed under the Franchise Act 1998

In Malaysia, Perbadanan Nasional Berhad (PNS) is spearheading the development of Malaysia’s franchise industry

Malaysian Franchise Association (MFA) was established in 1994 to assist in the implementation of Government program to promote entrepreneurship through franchising opportunity