Whether you’re the brand owner ready to let other people run your shop, or the person about to sign up to run one, there’s a step you can’t skip in Malaysia: the franchise has to be registered with the Registrar of Franchises before it’s operated or offered for sale. Some of it feels like red tape — but most of the rules exist to protect the person buying in, and knowing them saves you real money and grief. Here’s how it actually works.
It helps to know the spirit of the law before the letter of it. The Franchise Act is, frankly, paternalistic — it’s built to stop a big, polished franchisor from rushing a first-time buyer into a deal they don’t fully understand. That’s why it forces registration, upfront disclosure, a cooling-off period, and a minimum term. If you’re the one buying in, the Act is quietly on your side. If you’re the franchisor, treat registration as the price of being taken seriously — and a filter that keeps unregistered chancers out of your market.
This is the part that surprises a lot of first-time franchisors, so let’s get it out of the way early — you can’t franchise a brand-new idea. Before the Registrar will seriously look at you, you generally need to show a real track record:
If you don’t have those yet, registration isn’t your next step — building the track record is. It’s worth hearing that now rather than three months into an application.
You, the franchisor, register first — before you operate the franchise or offer it for sale. If you’re a foreign brand, the process is now the same as for a local one: the old separate approval for foreigners (Section 54) has effectively folded into a single online application.
Your franchisees have to be registered too — but here’s the twist. Legally, a local franchisee must be registered within 14 days of signing; a foreign franchisor’s franchisee must be registered before it starts trading. In practice, though, MyFEX 2.0 is built so that you the franchisor file it from your account. So if you’re the one buying in, don’t assume it’s been handled — ask your franchisor for proof that your registration is done. Master and sub-franchise setups just repeat the same pattern one level down.
The portal submission is the easy part. Assembling the paperwork is the real job — and it’s where the cost lives. Expect to put together:
Here’s the part people get backwards. The government’s own fee is small. What costs money is getting ready to file. Registration lasts five years, and renewal runs RM1,000 for a local franchisor or RM5,000 for a foreign one — with the initial application fee in a similarly modest range. The Registrar, in other words, is not where your budget goes.
The real spend is preparation. Drafting a compliant agreement and FDD, writing the manuals, getting your accounts audited, and registering your trademark — most brands pay a lawyer or franchise consultant to handle this, and that’s where the bill lands, usually far above the government fee. How far depends on how complex your business is and who you hire.
| Item | Rough cost |
|---|---|
| Government registration / renewal fee | Modest — RM1,000 local / RM5,000 foreign per 5 years |
| Franchise agreement + FDD (legal drafting) | The bulk of the cost; varies with complexity |
| Operation & training manuals | Varies — often bundled with consultant fees |
| Audited accounts (3 years) | Your normal audit cost |
| Trademark registration (MyIPO) | Separate MyIPO fees |
Preparation costs aren’t set by the government and vary widely, so the honest advice is: budget for the professional help, not just the portal fee.
If you’re signing up as a franchisee, three rules are yours — and they’re worth more than most people realise:
The Act doesn’t treat skipping registration as a paperwork slip. It’s an offence — and a non-compoundable one, meaning it goes to court rather than a quiet settlement.
| Offender | First offence | Second / subsequent |
|---|---|---|
| Body corporate | Fine up to RM250,000 | Fine up to RM500,000 |
| Not a body corporate | Fine up to RM100,000, or up to 1 year’s imprisonment, or both | Fine up to RM250,000, or up to 3 years’ imprisonment, or both |
Registration isn’t forever — it lasts five years, and you renew through MyFEX 2.0 before it lapses (that’s the RM1,000 / RM5,000 fee again). Let it expire and you’re effectively running an unregistered franchise, back at square one. One historical note if you’ve been around a while: when the amended Act took effect, all older registrations expired, with a grace period to re-register that closed in August 2025 — so anything not migrated by then needs fresh attention.