Franchises in Malaysia: Opportunities & Registration Process

If you are new to entrepreneurship, starting a business from scratch can feel overwhelming—especially if you are risk-averse or unsure of the local market. A strong alternative to incorporating your own brand in Malaysia is to purchase a franchise, allowing you to operate a business with proven systems, brand recognition, and built-in customer trust.
The franchise industry in Malaysia has grown rapidly over the years. As reported by The Star, franchise sales are projected to increase from RM14.65 billion in 2020 to RM22.66 billion in 2025, demonstrating strong demand and market confidence. With rising consumer spending, urban expansion, and government-friendly policies, now is an ideal time to consider starting a franchise in Malaysia.

Best Franchise Opportunities in Malaysia (Across Categories)

Malaysia offers a diverse range of franchise opportunities—from F&B to services to retail—catering to different levels of investment.

While these are among the most recognised brands, Malaysia’s franchise marketplace includes hundreds of options across F&B, education, retail, wellness, beauty, logistics, and professional services.

Where to Find Franchise Opportunities in Malaysia

To shortlist the right franchise, you can explore multiple sources:

1. Search Engines
   Look up “franchise opportunities Malaysia” and browse official brand websites for franchise pages or inquiry forms.
2. Direct Brand Outreach
   Make a list of brands you admire and contact them directly. Most Malaysian-based franchisors are responsive and happy to share franchise kits.
3. Franchise Aggregator Platforms
   Platforms like iFranchise Malaysia help you compare investments, requirements, and sectors in one place.

Understanding the Malaysian Franchise Act (1998 & Amendments 2020–2022)

All franchises in Malaysia are governed by the Malaysian Franchise Act 1998. This was strengthened through the Franchise (Amendment) Act 2020, with key changes effective from 28 April 2022.

The Act regulates:

• Franchise agreements
• Mandatory franchise registration
• Rights and obligations of franchisors and franchisees
• Advertising and sale of franchises

Key Terms & Requirements Under the Act

• A franchisor must grant rights to use trademarks, trade names, and IP associated with the franchise.
• A franchisor has the right to maintain control over the franchisee’s operations to ensure brand standardisation.
• A franchisor must provide continuous support, including materials, operations manuals, training, and marketing.
• Franchisees may be required to pay a franchise fee or ongoing royalty fees.
• All registered franchises must renew their registrations every 5 years (new amendment).
• Franchisors must display the franchise registration certificate prominently at their business premises.

Note: The franchisor must ensure all trademarks/IP are registered with MyIPO before signing agreements.

Key Things to Consider Before Starting a Franchise in Malaysia

Starting a franchise involves long-term planning and due diligence. Here are the most important factors to evaluate:

1. Your Investment Budget

Determine how much capital you can commit.

• F&B franchises usually have medium to high startup costs.
• Gyms and fitness centres often require RM1M+ investment.
• Service or education franchises (e.g., Kumon) are more budget-friendly.

2. Market Demand, Location & Competition

Assess the population density, visibility, and accessibility of potential outlets.
Check if the area is saturated with similar brands.
Understanding your local target audience is critical to your outlet’s success.

3. Franchise Agreement Clarity

Identify any vague clauses or grey areas. Ambiguous terms can affect long-term operations, especially regarding:

• Territory protection
• Royalty structure
• Renewal terms
• Exit clauses

It is strongly recommended to have a legal expert review your agreement, especially with the new 2022 compliance requirements (certificate display, 5-year renewal cycle).

How to Register a Franchise in Malaysia (Step-by-Step)

Once you’ve shortlisted your franchise and completed your due diligence, the next step is ensuring full compliance so you can operate legally in Malaysia. This involves two major stages:

• Registration with the Registrar of Franchise (ROF)
• Registration of your business entity with Suruhanjaya Syarikat Malaysia (SSM)

Below is the complete, updated, and geo-optimised breakdown.

Stage 1: Registration With the Registrar of Franchise (ROF)

The process differs depending on whether the franchisor is Malaysian or foreign:

1. Registration for Local Franchisors (Malaysia-Based)

Local franchisors must register with the ROF within 14 days from the date the franchise agreement is signed.

This means if you’re buying a franchise from a Malaysian brand (e.g., Tealive, Bonia, 7-Eleven), the franchisor must legally submit their documents to ROF immediately after signing.

2. Registration for Foreign Franchisors

Foreign franchisors must obtain approval before starting the franchise business in Malaysia.
This includes:

• Mandatory registration under Section 6
• Approval under Section 54 (for foreign entities)

This rule prevents unregistered overseas brands from operating in Malaysia without meeting proper compliance standards.

Documents Required for ROF Franchise Registration

The franchisor (not the franchisee) is responsible for submitting a comprehensive set of documents to ROF. These include:

• Mandatory Submission List
• Franchise Agreement
• Operations Manual
• Training Manual
• Certificate of Incorporation
• Forms 24 & 49 (showing shareholding & director info)
• Annual Return Form
• Last 3 years’ audited financial statements
• 5-year financial projection for the franchise
• Certified true copy of registered trademark (MyIPO)
• Organisational chart of franchisor company
• Company brochures / marketing materials
• Photos of outlets (existing branches or prototypes)
• Bankruptcy search results for all directors
• Business proposal (competitive advantage, strategies, growth plan)

Processing Time

Registration typically takes 2–6 months, depending on:

• completeness of documentation,
• trademark status,
• foreign vs local franchisors.

Stage 2: Registering Your Business With SSM (Suruhanjaya Syarikat Malaysia)

Even though the franchise must be registered with ROF first, you as a franchisee must also register your company to officially begin operations.
Most franchisees in Malaysia choose to register an Sdn Bhd (Private Limited Company) because it offers:

• limited liability protection
• better credibility with landlords & suppliers
• easier scalability
• ability to bring in investors in the future

To register your company with SSM, you must submit:

• proposed company name
• business activity codes
• shareholder & director details
• registered office address
• constitution (if needed)

Full breakdown of Sdn Bhd setup is available in the separate guide, but the general incorporation time is 1–3 days if documents are in order.

Key Compliance Requirements After Registration

Once your franchise is approved and your company is incorporated, you must also follow Malaysia’s updated compliance rules.

1. Display Franchise Registration Certificate

Under the 2022 amendments, every franchise outlet must visibly display the ROF franchise certificate at the business premises.

2. Renew Franchise Registration Every 5 Years

All franchise registrations must be renewed every five years.
This applies to both franchisors and franchisees.

3. Ensure Trademark Ownership Remains Valid

Malaysia emphasises IP protection—your franchisor must maintain an active trademark under MyIPO throughout the agreement.

4. Follow Ongoing Operational Standards

This includes:

• adopting operational procedures
• attending scheduled training
• reporting revenue as required
• paying royalties, marketing funds, and renewal fees

Failure to comply can lead to penalties or termination of the franchise agreement.

Important Note From Malaysian Corporate Secretaries

Before registering any franchise, ensure:

• All trademarks are properly registered under the franchisor.
• All IP associated with the brand (logo, brand name, SOPs, product formulas, packaging) is protected.
• The franchise agreement aligns with the latest amendments (2020/2022).

This protects both the franchisor and franchisee from future disputes.

Conclusion

Malaysia continues to be one of Southeast Asia’s fastest-growing franchise markets, supported by strong regulations, rising consumer demand, and government initiatives that promote franchising as a sustainable business model.
Buying a franchise in Malaysia provides entrepreneurs with:

• proven brand systems
• comprehensive operational support
• lower risk compared to starting your own brand
• faster route to profitability

By following ROF regulations, understanding the Franchise Act, and ensuring full SSM compliance, you can confidently build and scale your franchise business anywhere in Malaysia.