Malta has become a prolific economy within the EU space which has enabled a great number of foreign investors to open companies here. While some of them decided to start their own businesses, others seeking to make a sure investment decided to open franchises despite the higher costs. Malta has no specific legislation on franchises, however a franchise agreement encompasses provisions of the Civil Law, the Commercial Law and even specific regulations comprised in the intellectual property legislation.
Our company formation agents in Malta can offer more information on laws governing franchises.
Franchisor and franchisee in Malta
The parties involved in opening a franchise in Malta are the franchisor and the franchisee. While the former is the company, local or foreign, owning the brand that will be marketed, the franchisee is the party paying for marketing the brand. Both franchiser and franchisee have legal requirements that abide by. The franchisor is required to provide the Maltese franchisee with instructions, including a guidebook on how to sell their products and services, and also to offer specific training to the franchisee and their employees in Malta. It is important to know that the franchisor must also grant their partner the right use the trademark or other related intellectual property rights on the franchise. In return, the franchisee must respect the instructions offered by its partner.
Franchise agreements in Malta
Opening a Maltese franchise implies drafting and singing a franchise agreement which can take various forms. The most common agreement is the business format franchise contract which allows a franchisee to use the license and the procedures of the franchisor. There are also franchises based on the sole distributions of services or goods in Malta.
Franchise agreements can be prepared so they offer the franchisee the possibility of operating a single facility or more than one facilities. There is also the option of allowing the franchisee to re-sell the franchise to others. Franchise agreements are not required to be registered with any local authority in Malta.
For assistance in setting up a franchise in Malta, please feel free to contact our company registration representatives.