Franchising in Malaysia: Registering a Franchisor or Franchisee

You cannot legally offer a franchise in Malaysia the way you would in most of the world — first quietly signing up a few outlets, then formalising things later. The law flips that order. Registration comes before the first offer, and since 2022 it applies to franchisees too.

Malaysia is one of a handful of countries with a dedicated franchise statute, the Franchise Act 1998, enforced by a Registrar of Franchise. A wave of amendments — the Franchise (Amendment) Act 2020, in force from 28 April 2022 — tightened the rules and moved everything onto a new online portal. Responsibility for the franchise regime has since shifted between ministries: the portal was launched by the then Ministry of Domestic Trade and Cost of Living (KPDN), but the Registrar of Franchise and the MyFEX 2.0 portal now sit under the Ministry of Entrepreneur Development and Cooperatives (KUSKOP, also rendered MECD), which took over administration during 2023–2024. Here is how registration actually works for each party.

Who has to register, and under which section?

The Act draws a line by role rather than by nationality — though a 2020 change deliberately narrowed the old gap between local and foreign players.

• Local franchisors register their franchise under Section 6 of the Act before offering to sell it.
• Foreign franchisors must first obtain approval under Section 54, then also register under Section 6. Before the amendments, Section 54 approval alone was enough; now both steps are compulsory.
• Master franchisees of a foreign brand register the franchise under Section 6.
• Franchisees — the outlet operators — must now register too. This is the biggest practical change from the amendments: registration is no longer only a franchisor’s duty.

A franchisee of a foreign franchisor must register before commencing the franchise business. A franchisee of a local franchisor or master franchisee must register within 14 days of signing the franchise agreement. In practice the franchisor usually files the franchisee’s registration through the same portal account.

What is the MyFEX 2.0 portal?

Every application now runs through MyFEX 2.0, the online system launched by the Registrar on 28 July 2022 to replace the older MyFEX 1.0. It handles new franchisor registrations (local and foreign), franchisee registrations, consultant and broker registrations, renewals, and the annual franchise business report.

The portal is operated by the Franchise Development Division under the Ministry of Entrepreneur Development and Cooperatives (KUSKOP/MECD) — reflected in its address, myfexv2.kuskop.gov.my. Paper filing is no longer available; all applications are made online. A franchisor and its franchisee share a single account login to submit and track filings.

What documents does a franchisor need?

The centrepiece of any franchisor application is the Franchise Disclosure Document (FDD) in the Registrar’s prescribed form, filed together with the franchise agreement and supporting records. Typical requirements include:

• The completed disclosure document in prescribed form
• The franchise agreement
• The operation manual and training manual
• The latest audited accounts (commonly the last three years)
• For foreign franchisors, the Section 54 approval

Crucially, disclosure is not just a filing exercise — it is owed to the franchisee. Section 15 requires the franchisor to give the prospective franchisee the disclosure document and the franchise agreement at least 10 days before the agreement is signed, so the franchisee has time to review the deal.

What must be inside the franchise agreement?

Section 18 lists mandatory terms every franchise agreement must contain — and failure to include them is now a criminal offence, not merely a defect. The clause that stands out for franchisee protection is:

• A cooling-off period of at least 7 working days, during which the franchisee may terminate the agreement. The franchisor may keep a reasonable sum for expenses already incurred.

Separately, the Act imposes a minimum franchise term of five years (understood to fall under Section 25, not the Section 18 clause list), so a franchisee is not locked into a term too short to recover its investment.

Note the two different “five years” in this regime: the agreement’s minimum term is five years, and, separately, the registration itself stays valid for five years before it must be renewed. They are not the same clock.

Fees, validity and renewal

Official fees for registration and renewal are prescribed by regulation and are modest relative to the real cost of franchising, which sits in preparing compliant documents. The fee schedule has been revised under the MyFEX 2.0 framework, and published figures from older sources (such as the RM1,000 fee under the superseded Franchise (Forms and Fees) Regulations 1999) may no longer be current. Confirm the exact prescribed fees for your application type directly on the MyFEX 2.0 portal before filing.

A registration is effective for five years from the date of the Registrar’s written notice. To renew, the application must be lodged within 30 days of expiry. Franchisors and franchisees must also display their franchise registration in a conspicuous position at the place of business.

What was the 2022–2025 re-registration deadline?

Because the 2020 amendments changed the framework, every franchise already registered under the old MyFEX 1.0 system had to re-register under MyFEX 2.0 — franchisors and franchisees alike.

The Act granted a three-year grace period from 1 August 2022, meaning re-registration had to be completed by 31 July 2025. Official fees were waived for anyone re-registering within that window. Franchisors that missed it risk the Registrar issuing a notice of suspension, termination or cancellation of the registration. If you registered before 2022 and have not moved to the new system, treat this as urgent and check your status on the portal.

What are the penalties for getting it wrong?

Non-compliance is an offence under Section 39 of the Act, with penalties that scale by whether the offender is a company or an individual:

Offender	First offence	Subsequent offence
Body corporate	RM10,000 – RM50,000	RM20,000 – RM100,000
Individual	RM5,000 – RM25,000, or up to 6 months’ imprisonment	RM10,000 – RM50,000, or up to 1 year’s imprisonment

These apply to failures such as operating without registration or omitting mandatory terms from the agreement. The message is consistent across the Act: registration and disclosure are conditions of doing business, not paperwork to catch up on later.

What’s next

If you are bringing a brand into Malaysia or scaling an existing one, sequence the work in the right order: incorporate the operating entity with SSM, prepare a compliant franchise agreement and disclosure document, secure Section 54 approval if you are foreign, then register under Section 6 through MyFEX 2.0 — all before you make your first offer. Franchisees should confirm they received the disclosure document at least 10 days before signing and that the agreement carries the cooling-off period.

Fees and prescribed forms change. Before filing, confirm current requirements directly on the MyFEX 2.0 portal (myfexv2.kuskop.gov.my) or with a Malaysian franchise lawyer, and read the Franchise Act 1998 sections cited above for the authoritative wording.