Wednesday, February 1, 2017

Chatime dispute a wake-up call for Malaysian franchising industry: MFA

The highly publicised dispute over the Chatime franchise highlights the need for better understanding of the mutually beneficial relationship between franchisors and franchisees, according to the Malaysian Franchise Association (MFA).

According to the MFA, franchise agreements provide a win-win situation for both parties, but the challenges inherent are the knowledge and capacity to observe the required conduct by both parties in keeping with the spirit of the agreement.

“The lessons (from disputes) are that one must have full understanding of the business and that one must not be arrogant. Be able to open up and seek prudent views in approaching the issues. You don’t want to waste money on disputes because we want that valuable time to do business,” MFA chairman Datuk Mohd Latip Sarrugi told, explaining that legal fees for franchise disputes can cost RM50,000 to RM100,000.

He said MFA, which has over 300 members, was not approached to mediate in the dispute between Loob Holding Sdn Bhd, the master franchisee for the Chatime brand in Malaysia, and Taiwanese franchisor La Kaffa International Co Ltd.

Loob is not a member of MFA.

“Hypothetically, when members have problem, we normally encourage them to discuss things amicably so that they’re not known to be having issues in the relationship (between franchisor and franchisee), which is not good for growth of that particular brand, nor is it good for the industry. Prudent business normally understands. They don’t want to wash dirty linen in public. If both parties have good conscience and want to do business, they normally settle the issues,” said Latip.

He said over the years, the Malaysian franchise industry has grown and its stakeholders, including franchisors and franchisees, have become more knowledgeable, and tolerance has always been the basis of moving forward.

“I appeal that during these difficult (economic) times, be understanding because this is the time a good franchisor will be seen to be able to guide franchisees in the business. Any changes in the mode of doing business must not result in less favourable (outcome) to the franchisees. The Franchise Act 1998 came into being to regulate the conduct of franchisors and franchisees doing business in this country,” said Latip.

The Franchise Act 1998 states that any changes in the franchise documents must be filed with the Registrar of Franchise under the Ministry of Domestic Trade, Cooperatives and Consumerism. The registrar can take action against the relevant party for an offence under the Act.

The minimum term for a franchise in Malaysia is five years.

Latip said if a franchisee has defaulted, the franchisor must send a notice to the franchisee to remedy the breach, giving 14 days before any further action is taken.

He highlighted that businesses, especially master franchisees, should consult legal advisers before and during the commencement of business to understand the franchise agreement, and not seek legal advice only when things have turned sour.

“The language in the (franchise) agreement is not ordinary language. You may understand the language but you may not be able to foresee the consequences. There are a lot of details to be aware of. Franchisees should equip themselves before embarking on the franchise business.

"Franchisees must not get lured by the external look of the franchise brand and fashion, because they’re going in for a long-term relationship," said Latip.

Loob, which is expected to unveil its new brand of tea stores by March 6, has lodged a police report against brand owner La Kaffa and is committed to keeping its 165 outlets in Malaysia open. The dispute between Loob and the franchisor came out in the open following La Kaffa’s announcement early last month that it had terminated the franchise and would immediately take over all the 165 Chatime outlets in the country. - The Sun

Friday, December 23, 2016

Harnessing IP Talk

We are organizing an event called 'Harnessing IP' in Technology Park Malaysia, Bukit Jalil on Thursday, 12 Jan 2017, 2.30 pm. Kindly RSVP.

Saturday, December 17, 2016

Industrial Design And Plain Packaging

The government wants to introduce plain packaging for cigarette boxes to curb the habit amongst Malaysians. Are they infringing on any corporate rights? Business FM have a chat with Chew Phye Keat, President of the Malaysian Intellectual Property Association (MIPA) and Joshinae Wong, Partner at Christina Chia Law Chambers (CCLC) to have a better comprehension of what is at stake here.

Friday, December 16, 2016

MRM to Govern Rights to Play Music in Public

Image by MyIPO

Music Rights Malaysia Berhad (MRM) have been formed by Minister of Domestic Trade, Datuk Hamzah Zainudin, as the sole agency to manage rights to play music in public. The announcement was made in a dinner hosted by Perbadanan Harta Intelek Malaysia (MyIPO) on 8 Dec 2016. Veteran lyricist Habsah Hassan has been appointed as Secretariat Chairperson for MRM, according to Berita Harian.

Retail stores or restaurants play music to entertain customers. A license is required by a premise to play music in public (in their store). This license have to paid periodically even though the premise owner is playing music from a radio or personal music collection. Note that music form personal music collection provides right for personal use only. MRM will be the sole body to collect licensing fees from parties that play music in public from 1 Jan 2017 onward.

The amount of licensing fee is not mentioned. The licensing fees collected by MRM will be distributed as royalties to people involved in the music industry. Music creation involves multiple parties including:
- lyricists
- composers
- publishers
- performers (artists and musicians)
- recording companies

Currently, there are four copyright collection agencies namely Music Author's Copyright Protection (MACP), Public Performance Malaysia (PPM); Recording Performers Malaysia (RPM) and Performers Rights and Interest Society of Malaysia (PRISM). Parties that play music in public still need to pay their dues to the respective agency before 2017. These four copyright collection agencies will manage the distribution or royalties among its members, even after the establishment of MRM.


Friday, December 2, 2016

Big Mac inventor dies at age 98

The man who invented the Big Mac, considered the quintessential American fast food burger, has died.

Michael “Jim” Delligatti passed away on Nov 28 at his home in a Pittsburgh, Pennsylvania, suburb. He was 98 years old.

Delligatti, a McDonald’s franchisee, came up with the idea in 1967 because he said customers wanted a bigger sandwich. And so he came up with the chain’s signature burger – two all-beef patties, “special sauce”, lettuce, cheese, pickles, onions on a sesame seed bun.

According to AP, his invention was almost rejected by McDonald’s because it was happy with its traditional meals of hamburgers, cheeseburgers, fries and milkshake were selling well.

He got permission to try his new burger in 1967 and sales jumped 12%, the Times said. Within a few years, McDonald’s was advertising the Big Mac nationwide.

“This wasn’t like discovering the light bulb,” he said. “The bulb was already there. All I did was screw it in the socket.”

He said the idea came from rival burger restaurants in the mid-1960s.

After the Big Mac’s invention, the company expanded its menu further, creating an age of new menu items such as the Egg McMuffin (a creation also attributed to Delligatti) and Filet-o-Fish.

But, it was the Big Mac that became a cultural icon. According to MacDonald’s Delligatti never received any royalties for the invention.


Saturday, October 15, 2016

His Majesty the King as inventor and innovator

"VILLAGERS have said that miracles happen wherever the King treads. Arid land becomes fertile once again."

To the uninitiated, it must be tempting to dismiss this approximate translation of a Thai radio spot as worshipful hyperbole. Yet to Thais, apart from the obvious affection towards their King, the statement contains a very real element of truth. For over half a century, His Majesty King Bhumibol Adulyadej has applied his technical ingenuity and resources to improving the lives of his people, in particular farmers otherwise at the mercy of nature. His inventions have helped make droughts more bearable, water less polluted and innovation more widely appreciated.

What the Thai people have long known has again been given due recognition by the outside world.

On January 14, 2009, Dr Francis Gurry, director-general of the Geneva-based World Intellectual Property Organisation (WIPO) presented the WIPO Global Leaders Award to His Majesty the King.

WIPO, a United Nations specialised agency with 184 member states, announced in January 2007 that His Majesty would be the first recipient of this award - its most prestigious recognition of outstanding contributions by world leaders to the cause of intellectual property to promote development.

In its press release, WIPO acknowledged His Majesty's "remarkable contribution to intellectual property both as an inventor and as an active proponent of intellectual property as a tool for development", also noting him as an artist who has "created over 1,000 works including paintings, photos, musical and literary works such as songs and novels".

Some of His Majesty's best-known projects relate to artificial rain. Rain-making techniques invented by His Majesty, with such memorable names as "sandwich" and "super sandwich", have brought welcome moisture to land parched by drought, and relief to thousands of farmers.

The Royal Rain Project, as it is called, is one of the more than 4,000 royally-initiated development projects to date. Others include those pertaining to irrigation, farming, drought and flood alleviation, crop substitution, public health, distance learning and employment promotion. - Government of Thailand

Tuesday, September 6, 2016

Budget 2017 Wish

Individual inventors have great ideas. Tax rebates should be given for invention investment and promotion activities including patent fillings. #Bajet2017 #Myipo

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