Franchising in Singapore
Economy
Singapore has the world's 43rd largest economy.
Legislation
There is no specific franchising legislation in Singapore. The
Franchising and Licensing Authority (Singapore) (FLA) provides
guidance for members. This is a voluntary authority however, once a
member, compliance with its Code of Ethics is mandatory.
Franchise Market
In addition to the promotion of local franchises, the FLA is
boosting the entire franchising industry through the creation of
the 'New Assistance Scheme'. Part of the New Assistance Scheme
'aims to address key issues facing most franchisees such as access
to funding, advice on manpower planning, marketing, branding and
protection of intellectual property rights'.
Currently the most popular franchising sectors are food and
beverage and retail. The value of the franchise industry in
Singapore has been increasing in recent years and was estimated to
be worth $8billion in 2008 alone.
Franchise Legislation
- There are no franchise specific registration requirements,
however standard business registrations will apply and will vary
depending on the structure of the franchised business.
- There are no disclosure requirements, with the exception for
FLA members.
- The FLA Code of Ethics provides that disclosure documents
should be provided at least seven (7) days prior to the execution
of the franchise agreement. There are no updating
requirements.
- The franchisor and franchisee are free to negotiate the terms
of the franchise agreement contractually.
Conclusion
The lack of specific franchise legislation under one Act and the
governance of franchise agreements currently subject to Singaporean
contract law suggest that franchisors seeking to expand into the
Singaporean franchise market should seek specialist legal advice;
this will help ensure their legal agreements are complaint and
enforceable under the local laws in Singapore.