Protect Your Trade Marks Before Franchising Your Business

A name that customers recognise is not necessarily ready for use across a franchise network. Before franchising an existing business in Malaysia, owners need to ensure that its trade marks are protected, owned by the right party and legally available for franchisees to use. This helps prevent disputes that could force the entire franchise network to replace signage, packaging and marketing materials.

1. Identify the marks that genuinely need protection

Start by listing the elements customers use to recognise the business: its main name, logo, product range names and other important brand elements. Distinguish the core identity from temporary promotional material. The aim is not to register every word, but to identify the assets that underpin your franchise offering.

Gather examples of actual use from signage, receipts, packaging, menus and digital channels. If the name on the shop differs from the name on the packaging, decide whether franchisees will use both. Do not select marks for registration based on old design files that no longer reflect the business.

Prepare a simple register covering:

• The mark or name in use.
• The goods or services associated with it.
• The entity currently using it.
• The registered owner or applicant, if any.
• The application or registration status and key dates.

Registering a business name with the Companies Commission of Malaysia (SSM) is not the same as registering a trade mark. Likewise, owning a domain name or social media account does not, by itself, provide registered trade mark protection. Treat each of these as a separate asset to be managed individually.

2. Check ownership and the right to authorise use

Businesses that start small often use a name or logo registered in the founder’s name. If another company later becomes the franchisor, that ownership arrangement needs to be addressed. Having the same shareholders does not mean that two entities hold the same legal rights.

Review registration certificates, application records, previous agreements and assignment documents. If an external designer created the logo, also check the rights to that work. Payment for design services alone should not be treated as conclusive evidence that all necessary rights have been transferred.

If another party owns the mark, seek advice on an appropriate assignment or licence. A licence to use a mark does not necessarily allow the licensee to grant usage rights to franchisees. The authority to grant further usage rights must be clear, along with its territory, duration and conditions.

For example, an operating company may have permission to use a founder-owned brand for one shop. That permission may not extend to establishing a franchise network. Resolve this before making commitments to prospective franchisees, not after they have paid to fit out their premises.

3. Manage registration under Malaysian law

Trade mark protection in Malaysia is governed by the Trade Marks Act 2019, with registration handled by the Intellectual Property Corporation of Malaysia (MyIPO). Before filing an application, carry out searches to identify similar earlier marks. Searches help assess risk, but do not guarantee that an application will be approved or that no objections will arise.

Determine which goods and services need coverage based on the actual business model. For example, restaurant services and packaged food products may require different coverage. Do not assume that one registration protects all current activities and expansion plans.

Franchising is separately subject to the Franchise Act 1998, including amendments in force. Section 24 requires franchisors to register the trade marks associated with the franchise before applying for franchise registration under section 6. Brand protection must therefore be scheduled ahead of the franchise application; evidence of filing is not equivalent to a completed registration.

Section 6 also requires franchisors to register the franchise before operating a franchise business or offering it for sale. Trade mark registration does not replace franchise registration, and company registration does not replace either.

Check current requirements with MyIPO and the Registrar of Franchises, particularly where the trade mark owner is a separate party, the brand is licensed or applications remain pending. Seek professional advice to establish a legally compliant structure before setting a launch date.

4. Set controls on use from the outset

Once the rights have been verified, decide how franchisees may use the marks. Focus on practical decisions: approved logo versions, use on premises and digital channels, and who approves local promotional materials. Clear controls help customers recognise a consistent brand experience across the franchise network.

Also establish who owns or controls branch domain names and social media accounts. Avoid having important accounts registered in an employee’s name without arrangements for handing over access. Set out the process for removing branded materials and stopping use of the marks when a franchisee’s rights end, subject to the agreement and applicable law.

Appoint someone to monitor renewal dates, retain evidence of use and receive reports of brand misuse. If a mark is used without permission, preserve the evidence first and seek advice before threatening legal action.

Practical action: complete a trade mark register, verify the chain of ownership and identify gaps in protection before offering franchises. A brand with demonstrable legal rights is better prepared to grow with franchisees.