Franchising is one of the most common ways of doing business in Malta. During the last few years, the Maltese economy has registered significant growth which has attracted a great number of foreign investors with the money to create franchise businesses.
There are several types of franchises which can be set up in Malta. They are governed by the Contract Law. Our lawyers in Malta can offer more information on the legislation related to creating a franchise business in this country.
Types of franchise businesses which can be set up in Malta
Compared to other European jurisdictions, Malta has more developed framework which provides for the establishment of franchises. The local legislation recognizes the following types of franchises in Malta:
- – the single-unit franchise which enables an enterpriser, called franchisee, to be the sole representative of the parent-company, called franchisor;
- – the multi-unit or the area franchise which enables the franchisee to open more franchise businesses;
- – the master franchise business which can sublet the venture to other enterprisers.
It should be noted that opening a franchise business in Malta is subject to a certain fee or tax which must be paid to the franchisor. This fee or tax depends on the type of franchise agreement signed and the type of unit which will be set up.
Our law firm in Malta can help you understand how a franchise agreement works.
What does the setup of a Maltese franchise business imply?
As mentioned above, the enterpriser, also known as the franchisee, must sign a franchise agreement with the other party – the franchisor. However, before that, the entrepreneur must first register a business with the Maltese Trade Register. The sole proprietorship as well as the limited liability company are suitable for starting a franchise business in Malta.
Following the registration of the company, the parties can agree on the type of franchise unit and what the business will imply. The franchise agreement does not have to be registered with any authority.
If you want to set up a franchise business in Malta and need assistance with the registration of any type of company for this venture, please contact us. Our Maltese lawyers can also help you draft the franchise contract.