REGULATORY FRAMEWORKS AND FRANCHISE INDUSTRY SUSTAINABILITY: A COMPARATIVE ANALYSIS OF MALAYSIA AND GLOBAL BEST PRACTICES

Abstrak

The sustainability of the franchise industry is increasingly influenced by the quality and adaptability of regulatory frameworks that govern franchisor-franchisee relationships. In Malaysia, the Franchise Act 1998 provides a foundational legal structure; however, concerns remain regarding its enforcement effectiveness, alignment with international standards, and adaptability to modern franchise practices. This study aims to evaluate the strengths and limitations of Malaysia’s regulatory environment and benchmark it against global best practices from advanced franchise economies such as the United States, Australia, and the European Union. Using a qualitative comparative methodology, the research incorporates semi-structured interviews with policymakers and franchise stakeholders, complemented by document analysis of legal statutes and policy reports. Findings reveal that although Malaysia’s regulatory framework promotes transparency and registration compliance, it lacks enforceable penalties, structured dispute resolution mechanisms, and franchisee representation. In contrast, jurisdictions like the U.S. and Australia implement rigorous disclosure requirements, good-faith obligations, and tiered enforcement strategies that contribute to industry resilience and stakeholder trust (FTC, 2021; ACCC, 2020). The study identifies policy gaps such as ambiguous definitions, procedural delays, and limited use of digital compliance systems, all of which hinder operational efficiency and investor confidence. The study contributes theoretically by emphasizing the role of institutional quality in franchise performance (Alon et al., 2021; Yin & Luo, 2023), and practically by offering policy recommendations including digitalization, franchisee advocacy platforms, and regulatory reforms. These findings are relevant to policymakers, franchise operators, and scholars seeking to enhance the long-term sustainability of the franchise sector in emerging markets.