Do I Need to Register a Trademark Before Franchising?

Short answer: Yes. In Malaysia, you should register your trademark before franchising your business. Trademark ownership is a legal requirement for franchise registration and forms the foundation of any franchising arrangement.

A Common Scenario We See From Growing Businesses

Just yesterday, one of our clients came to us to enquire about franchise registration for their café business.

They were excited. The business had been operating for more than five years and was performing well. They now wanted to expand through franchising and sought our assistance to take the next step.

When we went through the usual checklist for a franchise application, everything seemed to be in order. The business had been profitable for more than three years. The operation manual and training manual were ready.

Until we discovered one issue.

They had not registered their trademark.

Is Trademark Registration Required Before Franchise Registration?

Many business owners are not aware that trademark registration is not optional when it comes to franchising.

Under Section 24 of the Franchise Act 1998, a franchisor is required to register the trademark relevant to the franchise before applying for franchise registration.

The law states that a franchisor must register the trademark in accordance with the applicable trademark legislation before submitting a franchise application. Although the Franchise Act still refers to the Trade Marks Act 1976, that legislation has since been repealed and replaced by the Trademarks Act 2019, which is currently in force.

In practical terms, this means a business owner cannot proceed with franchise registration unless the relevant trademark has already been registered.

Why Trademark Ownership Is the Foundation of Franchising

Franchising is, at its core, a form of brand licensing.

When you franchise your business, you are granting franchisees the right to use your brand name, logo, and business identity. If you do not legally own the trademark, you are effectively licensing something you do not fully control.

This is why trademark registration is treated as a fundamental requirement under franchise law and not merely an administrative formality.

Trademark Registration Takes Time

Once this issue was identified, the priority for our client became clear. The trademark had to be registered before they could move forward with franchising.

Business owners should be aware that trademark registration in Malaysia takes time. On average, the process takes about nine to fifteen months from the filing of a trademark application to successful registration, assuming the application proceeds smoothly.

The timeline may be longer if there is:

• A refusal or office action from the Registrar

• An opposition filed by a third party during the publication period

This timing issue often catches entrepreneurs by surprise, especially when expansion opportunities arise suddenly.

Can We License a Trademark Without Trademark Registration?

Because franchise registration was no longer viable in the short term, our client considered an alternative route: trademark licensing.

From a legal standpoint, it is correct that trademark registration is not strictly required to license a trademark. However, licensing without trademark registration carries significant commercial and legal risks.

Risks of Licensing a Trademark Without Registration

1) Commercially unattractive to licensees

A licensee may feel insecure if the trademark is not registered, as the brand lacks formal legal protection. This can make the licence commercially unattractive or reduce its value.

2) Risk of the licensee registering the trademark first

Without registration, there is a real risk that the licensee or another party may register the trademark in their own name.

3) Difficulty enforcing the licence agreement

If a dispute arises, enforcement becomes more challenging because the licensor’s legal ownership of the trademark may be questioned.

For businesses intending to scale, these risks are often underestimated until problems arise.

Why Trademark Registration Should Be Done at the Beginning of a Business

Trademark registration should be done at the early stage of a business. It should not be treated as a compliance exercise only when there is a need, such as applying for franchise registration or obtaining a signboard licence from the local authority.

Early trademark registration provides strategic advantages.

Advantages of Registering Your Trademark Early

1) Securing ownership before value exists

Registering early allows you to lock in ownership when the brand is still young. This is a low-cost step with high long-term upside.

2) Preventing others from registering your brand

Not all trademark disputes arise from copying. Sometimes, similar names are adopted coincidentally. Registration helps prevent future conflicts.

3) Being ready when opportunities arise

Business opportunities often come unexpectedly. A registered trademark allows you to license, franchise, or collaborate without delay, as seen in our client’s situation.

What This Means for Entrepreneurs

For entrepreneurs and inventors, trademark registration is not just an Intellectual Property formality. It is a strategic business decision.

Registering your trademark early gives you control over your brand, compliance with franchise law, and flexibility to expand when opportunities arise. Delaying trademark registration may save costs in the short term, but it often creates bottlenecks and risks when your business is ready to scale.

If franchising or licensing is part of your long-term plan, trademark registration should be treated as a foundational step, not an afterthought.

Need Help With Trademark or Franchise Registration?

If you are planning to franchise or license your business, it is important to ensure that your trademark registration and franchise strategy are properly aligned from the start.

At IP Gennesis, we assist business owners and entrepreneurs with trademark applications, Intellectual Property strategy, and pre-franchise IP readiness, so that expansion plans are not delayed by avoidable legal issues.

If you are unsure whether your trademark is ready for franchising or licensing, feel free to speak to us for a preliminary assessment before taking the next step.

Written by,

Lawrence Tan  

Registered Trademark, Patent and Design Agent

LL.B (HONS), CLP

Advocate & Solicitor

Disclaimer

This article is provided for general information and reference purposes only. It does not constitute legal advice and should not be relied upon as a substitute for professional advice.

For advice tailored to your business or situation, you are encouraged to consult a qualified legal or Intellectual Property professional.