Franchise Act to be amended soon

“With the new amendments, the franchisee will need to register with MFA as well. This way, we will be able to keep tabs on both parties.” He said this is necessary as there were many cases where the franchisor disappeared after setting up a few franchise centres, leaving the franchisees without support and help.

http://www.freemalaysiatoday.com
July 30, 2010

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Franchise Act to be amended soon
G Vinod

KUALA LUMPUR: The Franchise Act will be amended soon to plug certain loopholes in the existing legislation, Domestic Trade, Cooperative and Consumerism Minister Ismail Sabri Yaakob said today.

“The current Act only requires franchisors to register themselves with the Malaysian Franchise Association (MFA), and not the franchisees,” Ismail said after inaugurating the Franchise International Malaysia 2010 Expo and Exhibition at the Putra World Trade Centre today.

“With the new amendments, the franchisee will need to register with MFA as well. This way, we will be able to keep tabs on both parties.”

He said this is necessary as there were many cases where the franchisor disappeared after setting up a few franchise centres, leaving the franchisees without support and help.

“The proposed amendments also aim to help the franchisors and the government as well. There were cases where fresh graduates applied for government loans to set up franchise centres. After running the business for a while, they sell off the business and move on once they get a job offer leaving us with problems as well. We want to avoid all this.”

Ismail said his ministry will submit the proposed amendments to the Attorney-General's Chamber for study before discussing it at the weekly Cabinet meeting.

“We are planning to table the amendment at the next parliamentary sitting.”Sabri said.

Franchise academy
Ismail also said that Perbadanan Nasional Bhd (PNS) will set up a franchise academy to train potential franchisees to set up their business.

“We came to know that some franchisors do not conduct proper courses for potential franchisees before they take up the franchise.”

“Therefore, if the franchisors fail to train their candidates, the academy will train them instead.”

Ismail added that the academy will be built in the Klang Valley at the cost of RM20 million, with the funds coming from PNS itself.

http://www.freemalaysiatoday.com/fmt-english/business/8597-franchise-act-to-be-amended-soon


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