Friday, May 28, 2010

Understanding The Various Bodies Involved in Malaysian Franchising

May 27, 2010
Compiled by Rachel Poh

(1) Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) Franchise Development Division (FDD)

The Franchise Development Programme was started in 1992 and is part of the government’s efforts in achieving and creating a commercial and industrial community of Bumiputeras. Today, the FDD is tasked with the responsibility of formulating the policies in relation to this aspect of the socio-economic development of the country.

The Ministry had recently absorbed the functions of the FDD which was previously under the Ministry of Entrepreneur and Cooperative Development.

Whilst its mission is to assist in the creation of quality Bumiputera Commercial and Industrial Community, the roles and responsibilities of the FDD is still intact e.g. to:

1. Formulate macro policies; plan; implement; coordinate; monitor franchise development programmes for the franchise sector.
2. Register franchise businesses in accordance to the Franchise Act 1998.
3. Enforce the provisions of the Franchise Act 1998.

Hence the Division is divided into four units namely the Development Unit; the Registration Unit; the Enforcement Unit and the Administration Unit.

The Registration and the Enforcement unit are administered in accordance with the provisions of the Franchise Act 1998 and the Registrar of Franchise is designated to implement and enforce the various provisions.

(2) Perbadanan Nasional Berhad (PNS)

PNS is a development agency under the MDTCC assigned to take a leading role in the development of franchising in Malaysia. PNS in its current form has its mission to “develop world-class franchisepreneurs through superior delivery of integrated services and comprehensive products”. Its roles include investing in the development of the local and foreign franchise brands in Malaysia either directly purchasing the local rights or through master franchisees. PNS also lead and participate in the promotion of local franchises in domestic and international exhibitions. Other important roles include financing; training; franchise development; networking and research.

Of interest is the financing programme that includes schemes for the acquisition of equipment; renovation of business premises and injection of working capital. Another programme highly sought out is the developmental programme that identifies and develops suitable businesses with potential to be converted into franchise systems.

(3) Malaysian Franchise Association (MFA)

MFA is organised to protect the interests of its members; cultivate and protect the image of franchising; encourage ethical practice; and support government efforts in the development of the franchising sector. The main categories of the members are the franchisors; franchisees and support institutions such as the consultants, banks, lawyers, etc.

It is in the context of protecting the image of franchising, MFA is the rightful body to ‘represent’ any voices of dissatisfaction coming from within the franchise sector. Therefore it was an inappropriate move for anybody to voice their dissatisfaction through other organisations. MFA would be able to take the necessary action against any member franchisors as a measure to resolve any conflict.

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