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Direct Franchise Agreement Template for Malaysia

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Key Requirements PROMPT example:

Direct Franchise Agreement

"I need a Direct Franchise Agreement for my Malaysian food and beverage business, granting exclusive rights to operate in Kuala Lumpur, with specific provisions for Halal certification and local sourcing requirements to be effective from March 2025."

Document background
The Direct Franchise Agreement is a fundamental document used when establishing a franchise business relationship in Malaysia. This agreement type is specifically designed to comply with Malaysian franchise regulations, particularly the Franchise Act 1998 and its associated regulations. It is used when a franchisor wishes to grant direct franchise rights to a franchisee without intermediaries such as master franchisees or area developers. The document comprehensively covers all aspects of the franchise relationship, including mandatory disclosures required by Malaysian law, operational requirements, brand standards, financial terms, and territory rights. The Direct Franchise Agreement must be registered with the Registrar of Franchises in Malaysia and includes specific provisions that protect both parties while ensuring compliance with local regulations. This agreement type is particularly important as it forms the foundation of the franchise relationship and must balance commercial interests with regulatory requirements in the Malaysian context.
Suggested Sections

1. Parties: Identification of franchisor and franchisee with full legal names and details

2. Background: Context of the franchise system, brief history, and purpose of the agreement

3. Definitions: Comprehensive definitions of terms used throughout the agreement

4. Grant of Franchise: Scope of franchise rights, territory, and exclusivity terms

5. Term and Renewal: Duration of agreement and conditions for renewal

6. Franchise Fees and Payments: Initial fees, royalties, advertising contributions and payment terms

7. Franchisor's Obligations: Training, support, operations manual, ongoing assistance commitments

8. Franchisee's Obligations: Operational standards, compliance requirements, reporting obligations

9. Intellectual Property Rights: Usage of trademarks, patents, copyright and trade secrets

10. Training and Support: Initial and ongoing training requirements and support services

11. Quality Control: Standards, inspections, and compliance requirements

12. Marketing and Advertising: Marketing obligations, advertising funds, and promotional requirements

13. Confidentiality: Protection of confidential information and trade secrets

14. Non-Competition: Restrictions during and after the franchise term

15. Transfer and Assignment: Conditions for transfer of franchise rights

16. Termination: Grounds for termination and procedures

17. Post-Termination Obligations: Obligations and restrictions after agreement ends

18. Dispute Resolution: Procedures for handling disputes, jurisdiction, and governing law

19. General Provisions: Standard boilerplate clauses including notices, amendments, etc.

Optional Sections

1. Development Schedule: Used when franchisee must develop multiple units over time

2. E-commerce Rights: Include when online sales are part of the franchise system

3. International Operations: Required for franchises with cross-border operations

4. Sub-Franchising Rights: Include if franchisee has rights to sub-franchise

5. Equipment Leasing: Required if franchisor leases equipment to franchisee

6. Property Requirements: Include detailed property requirements if location-specific

7. Halal Certification: Required for food and beverage franchises requiring Halal certification

8. Social Media Policy: Include for franchises with significant social media presence

9. Data Protection Compliance: Detailed section when extensive personal data processing is involved

Suggested Schedules

1. Schedule 1 - Franchise System Description: Detailed description of the franchise system and business model

2. Schedule 2 - Territory Description: Detailed mapping and description of granted territory

3. Schedule 3 - Initial Fee and Recurring Payments: Comprehensive fee structure and payment schedules

4. Schedule 4 - Marks and Intellectual Property: List and images of all licensed trademarks and IP

5. Schedule 5 - Initial Training Program: Details of required initial training

6. Schedule 6 - Operations Manual Table of Contents: Overview of operations manual content

7. Schedule 7 - Equipment and Inventory Requirements: Specifications for required equipment and inventory

8. Schedule 8 - Approved Suppliers: List of approved suppliers and products

9. Schedule 9 - Financial Reporting Forms: Standard forms for financial reporting

10. Schedule 10 - Standard Operating Procedures: Key operational procedures and standards

11. Appendix A - Form of Confidentiality Agreement: Standard confidentiality agreement for staff

12. Appendix B - Personal Guarantee Form: Standard form for personal guarantees

13. Appendix C - Compliance Certificates: Required regulatory and compliance certificates

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
















































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Relevant Industries

Retail

Food & Beverage

Education & Training

Healthcare Services

Automotive Services

Hospitality

Personal Services

Professional Services

Home Services

Technology & Software

Fashion & Apparel

Beauty & Wellness

Entertainment & Recreation

Child Care Services

Convenience Stores

Relevant Teams

Legal

Commercial

Operations

Finance

Compliance

Business Development

Brand Management

International Development

Risk Management

Contract Administration

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Franchise Development Manager

Legal Counsel

Commercial Director

Operations Director

Business Development Manager

Compliance Officer

Finance Director

Brand Manager

Territory Manager

Franchise Relations Manager

Contract Administrator

Risk Manager

International Business Development Director

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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