Chapter 14 of my book, “The Franchise Code: Start, Structure & Scale Your Franchise in Malaysia (Page 202)” under the heading Franchise Offences and Penalties, I wrote,
“The Franchise Act 1998 establishes a strict legal framework to regulate franchise relationships. This legislation ensures transparency, fairness, and compliance among franchisors and franchisees. However, failure to adhere to these regulations can lead to severe consequences, including substantial fines, legal action, and even imprisonment in certain cases.
The Act penalises both wrongful acts (commissions) and failures to act (omissions). This means that not doing something required by law—such as failing to register a franchise or provide a franchise disclosure document—can constitute an offence.
While the term “offence” is not explicitly defined in the Franchise Act, legal practitioners commonly refer to the Criminal Procedure Code, which defines an offence as “any act or omission made punishable by any law in force.” This broad interpretation means that both actively breaking the law (e.g., making false statements) and failing to meet legal obligations (e.g., omitting to register a franchise) can attract penalties.”
As it is widely known that the Ministry is on the verge of implementing enforcement under the Franchise Act—and that such enforcement is among the Ministry’s key priorities this year—I have reviewed the tentative agenda for the upcoming Franchise Advisory Board meeting and intend to propose the following: that the Ministry, in collaboration with the main franchise regulatory body and relevant government agencies, immediately launch a nationwide roadshow comprising seminars, workshops, and stakeholder engagement sessions.
This roadshow should be organised in partnership with business chambers and associations, universities, professional body and key industry stakeholders—including franchisors, franchisees, and licensing operators. The primary objective is to equip the business community with the necessary legal understanding and compliance tools ahead of the enforcement phase.
By prioritising education and proactive engagement through this roadshow, the Ministry can foster voluntary compliance, minimise unintentional violations, and build a franchise ecosystem rooted in transparency, accountability, and sustainable growth.