In the grand structure of a Franchise Agreement, most attention gravitates towards the larger, seemingly more impactful clauses, those that govern intellectual property, territorial exclusivity, royalty payments, and termination rights. Yet, buried deeper in the agreement, often overlooked and dismissed as mere boilerplate, lies a seemingly minor provision that can wield enormous consequences: the Notice clause. Though short in length, its implications can be profound. In fact, improperly issued or ignored notices have resulted in lost legal rights, failed enforcement of breach claims, and even the breakdown of entire franchise relationships.
So, what is this clause really about? In simple terms, the Notice clause governs how formal communications between franchisor and franchisee must be made under the contract. It outlines how notices should be delivered be, it by registered post, courier, email, or, in some cases, electronic messaging platforms such as WhatsApp or Telegram. It also specifies to whom the notice must be addressed and when such communication is deemed to have been legally received. In a franchise arrangement, where trust, performance, and compliance are interwoven, getting the notice process right is not just a formality but foundational.
The importance of this clause in franchising cannot be overstated. Firstly, it can trigger legal consequences. For example, if a franchisee is in breach of contract, the franchisor may be required to serve a formal notice of default and provide a grace period to remedy the breach. If the notice is not served in the manner prescribed by the agreement—say, it was sent via WhatsApp instead of to the registered business address—the franchisee may later argue that no valid notice was received, rendering any termination or legal action void. The franchisor may lose not because they were factually wrong, but because they failed to follow the correct procedure.
Secondly, the Notice clause prevents ambiguity and disputes. It removes uncertainty by stating what constitutes a valid method of communication, ensuring both parties are on the same page. Without such clarity, a party could deny receiving a crucial document, dispute the delivery method, or claim the notice was sent to the wrong recipient. These scenarios often lead to protracted legal arguments that could have been easily avoided by a clear, enforceable notice provision.
Today, the ways we communicate have evolved. While traditional modes like registered post or hand delivery are still in use, instant messaging applications like WhatsApp, Telegram, and WeChat have become the norm in business communication. Their speed, convenience, and ability to capture real-time exchanges make them an attractive option for both franchisors and franchisees. But do these forms of communication hold legal weight when it comes to sending and receiving formal notices?
The answer lies in how courts have interpreted such electronic messages. In Mok Yii Chek v Sovo Sdn Bhd & Ors [2015] MLRHU 196, the High Court held that print-outs of emails and WhatsApp messages fall within the wide meaning of “document” under the Evidence Act 1950. Therefore, these messages can be treated as any other printed document in court, subject to evidentiary rules. The Court added that even if the authenticity of a WhatsApp message is challenged, it may still be admitted as evidence if two conditions are met:
- The message must relate to a relevant fact or issue in the case; and
- The party submitting the message must satisfy the procedural requirements for computer-generated documents, by providing a certificate under Section 90A of the Evidence Act.
In that case, the court not only admitted the WhatsApp messages into evidence, but emphasized their credibility due to their contemporaneous nature, using them to corroborate witness testimonies and giving them great weight.
However, courts are not without caution. In Mohamad Azhar Abdul Halim v Naza Motor Trading Sdn Bhd [2017] 1 MELR 383, the Industrial Court refused to attach evidentiary weight to a screenshot of a WhatsApp message due to the lack of critical information such as the sender’s name, phone number, profile picture, and timestamp. This reinforces the idea that while WhatsApp messages may be admissible, their probative value depends heavily on authenticity and completeness.
That being said, franchise agreements must still specify the accepted methods of delivering notice, and whether platforms like WhatsApp, WeChat, or email are permissible. A well-drafted notice clause provides clarity and avoids future disputes by stating what counts as proper delivery and when the notice is deemed to have been received.
Critically, although the Franchise Act 1998 does not define the term “notice,” the phrase “written notice” is used no fewer than eleven (11) times throughout the Act. This underscores the legislature’s emphasis on proper, documented communication particularly in high-stakes areas such as breach of agreement, termination, renewal, and extension of franchise terms. For example, the Act requires written notice before a franchisor can terminate a franchise agreement and also mandates written notice for renewals and refusals to renew. The absence of such written notice — or failure to deliver it properly — can render actions taken by either party invalid, and in some cases, unlawful.
The risk is real. Imagine a franchisor who sends a termination notice via WhatsApp, thinking it’s faster and easier. The franchisee later challenges the termination, stating they never officially received the notice as per the agreement. A court or tribunal may side with the franchisee—not on the merits of the case, but simply because the franchisor used an improper method. Such procedural missteps can undermine even the strongest legal position, leading to delays, losses, or invalidation of claims.
To avoid this, the Notice clause must be crafted with care. Best practices include clearly listing acceptable methods of delivery, naming specific persons and addresses for each party, and distinguishing between daily communications and formal legal notices. If platforms like WhatsApp or Telegram are to be allowed, the agreement should require acknowledgment of receipt and retention of message evidence such as screenshots or exported logs.
Below is a sample clause that captures these principles, balancing modern communication practices with legal safeguards:
“Any demand, consent, notice or other communication (“notice”) authorised or required to be made hereunder shall be in writing and may be given by facsimile, electronic mail, post or hand to a party at the address set out as follows:
(a) must be in legible writing and in English addressed as shown below:
(i) If to the Franchisor:
Address:
Attention:
Facsimile Number:
Email Address:
(ii) If to the Franchisee:
Address:
Attention:
Facsimile Number:
Email Address:
(b) is deemed to be given by the sender and received by the addressee:
• if by delivery in person, when delivered to the addressee;
• if by post, five (5) days from and including the date of postage;
• if by facsimile transmission, upon receipt by the sender of a confirmation of error-free transmission;
• if by email or WhatsApp (or similar platform), upon receipt by the sender of a confirmation of error-free transmission or a read acknowledgment;
but if the delivery or receipt is on a day which is not a business day or is after 4:00 PM (addressee’s time), it is deemed to be given at 9:00 AM on the next business day.
(c) can be relied on by the recipient and the recipient will not be liable to any other person for any consequences of that reliance if the recipient believes the notice to be genuine, correct, and duly authorised by the sender”
In conclusion, the Notice clause may appear minor, but its legal significance is major. It serves as a gatekeeper to many contractual rights and protections. For franchisors and franchisees alike, overlooking this clause could be a costly mistake. In the world of franchising—where clarity, consistency, and compliance matter—this small clause could very well cost you everything.