The Multi Unit Franchise Agreement serves as the foundational document for establishing and operating multiple franchise units within Malaysia's legal framework. This agreement is specifically designed for situations where a franchisee plans to develop and operate multiple units of the same franchise brand, typically within a defined territory or development schedule. It must comply with the Malaysian Franchise Act 1998 and associated regulations, including mandatory registration with the Franchise Development Division. The document encompasses comprehensive provisions for territory rights, development schedules, operational standards, and financial obligations, while addressing the unique challenges of managing multiple franchise locations. It is particularly relevant for expanding businesses seeking to establish a significant presence in the Malaysian market through a structured multi-unit development approach.
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1. Parties: Identification of the franchisor and multi-unit franchisee, including their legal status and registered addresses
2. Background: Context of the agreement, brief description of the franchise system, and the multi-unit development arrangement
3. Definitions: Comprehensive definitions of terms used throughout the agreement, including territory, development schedule, and unit-specific terms
4. Grant of Rights: Specification of exclusive/non-exclusive rights, territory definition, and development rights for multiple units
5. Development Schedule: Timeline and requirements for opening multiple franchise units, including minimum performance requirements
6. Term and Renewal: Duration of the development agreement and conditions for renewal
7. Fees and Payments: Development fees, franchise fees, royalties, and other financial obligations for multiple units
8. Obligations of Franchisor: Support, training, and assistance provided by franchisor for multiple unit development
9. Obligations of Multi-Unit Franchisee: Operational, financial, and development obligations for multiple units
10. Standards and Operations: Operating procedures, quality standards, and consistency requirements across units
11. Intellectual Property: Use of trademarks, trade secrets, and other IP across multiple units
12. Training Requirements: Initial and ongoing training requirements for multiple unit operations
13. Reporting and Inspection: Financial reporting, audit rights, and inspection procedures for multiple units
14. Transfer and Assignment: Conditions and procedures for transferring rights or units
15. Termination: Grounds for termination and its effect on individual units
16. Post-Termination Obligations: Obligations after agreement termination
17. Confidentiality: Protection of confidential information across multiple units
18. Governing Law: Application of Malaysian law and jurisdiction
19. Dispute Resolution: Procedures for resolving disputes under Malaysian law
1. Sub-Franchising Rights: Include when the multi-unit franchisee is granted rights to sub-franchise to others
2. International Operations: Include when units may be developed across international borders
3. Digital Operations: Include when the franchise involves significant online or digital components
4. Crisis Management: Include when specific procedures for managing crises across multiple units are needed
5. Environmental Compliance: Include when operations have significant environmental impact
6. Halal Certification: Include when relevant for food or product-based franchises in Malaysia
1. Schedule 1: Development Territory: Detailed description and maps of allocated territory for multiple units
2. Schedule 2: Development Schedule: Specific timelines and locations for unit openings
3. Schedule 3: Initial Franchise Fees and Ongoing Payments: Detailed fee structure for multiple units
4. Schedule 4: Operating Manual Summary: Key provisions of the operating manual
5. Schedule 5: Training Programs: Details of required training programs for each unit
6. Schedule 6: Equipment and Supplies Specifications: Required equipment and approved suppliers for each unit
7. Schedule 7: Brand Standards: Detailed brand and quality standards for maintaining consistency
8. Schedule 8: Reporting Templates: Standard forms for financial and operational reporting
9. Schedule 9: Unit Opening Procedures: Detailed requirements for opening each new unit
10. Appendix A: Trademark Usage Guidelines: Specific rules for use of intellectual property
11. Appendix B: Required Insurance Coverage: Insurance requirements for multiple unit operations
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