How to set up a franchise in UAE

Begin a Franchise in UAE: All the Information you require 2023

A franchise in UAE is an excellent business idea these times, due to the rise of this type of company in the country. These franchises cover all sorts of categories, from restaurants to convenience stores. However, you must be aware of the regulations and laws that you must comply with to start your business.

In this article, you will learn about the aspects related to the franchise business in the United Arab Emirates. Therefore, you will know what opportunities you will have and the complete process that you must go through. Let us see:

• -Opportunities for franchises in UAE
• -Process for franchising in UAE
• -Why should you set up a franchise in UAE?
• -How to choose the best UAE franchise?
• -We advise you legally in franchising UAE

1. Opportunities for franchises in UAE

The United Arab Emirates has one of the strongest economies today, thanks to diversification in recent years. Tourism has grown substantially, which has contributed to the increase in national GDP. Therefore, the country is one of the preferred destinations for doing business and foreign investment, due to the facilities offered by the authorities.

Free zones offer unrivaled franchising in UAE with 100% foreign ownership and zero tax. These types of companies usually generate about $30 billion and do not stop their growth. This is because of the participation of brands from countries such as the United States, Japan, China, Germany, and other countries.

In addition, there are more than 100 different types of franchises in the country and they are expanding faster and faster. The sectors with the largest number of franchises are the following:

• -Automotive section
• -Retail sale
• -Fashion
• -Fast food
• -Restaurant
• -Dry cleaner
• -Shipping Service

In addition, there are opportunities for franchises in UAE that require a high investment and some that are cheaper.

2. Process for franchising in UAE

For you to properly establish a franchise in UAE, you must complete all the necessary documentation. Moreover, this process involves a prior analysis, a business plan, and other important factors. In this section, we will show you the steps you need to take to establish a successful franchise.

2.1 Research the local market

Because the UAE business market is quite vast, you need to do thorough research. In the country, the authorities have established mechanisms to attract more foreign investors. Thus, you will find many lucrative franchises from which you can choose the ones that best suit you.

In addition, you can find two types of franchising UAE:

• -Single-unit Franchise
• -Multiple-unit Franchise

The former allows you to sell the products or services of the franchisor through a single company. On the other hand, multiple-unit franchises allow you to open several of them under the same company. Therefore, you need to establish what type of franchise you want to open or buy in the UAE.

Additionally, when you find an industry you want to invest in make sure you do some effective research. In the same way, you can ask the company you are interested in for the franchise disclosure document. In this way, you will be able to obtain important and detailed information about the company and the process itself.

Also, you can get advice through an expert organization to know all the legal aspects to start a franchise in UAE.

2.2 Business plan

To establish your franchise in UAE you must have a well-structured business plan. In this case, it must contain the following:

• -The details of the company
• -Commercial Activity
• -Competitor analysis
• -Your target market
• -The main competition

In addition to this, you must establish a good financial plan as well as a marketing plan that is suitable for your objectives. You should also consider a financing alternative that can support you in any situation.

2.3 Business License

You can open or buy a UAE franchise both on the mainland and in one of the many free zones in the country. Also, you should consider that this may affect the type of business license you need to apply for. This is because businesses on the mainland are different from those established in the said free zones.

For example, the owners of companies established in the free zones may have 100% ownership of the business. Whatever the place where you want to establish the franchise, you must apply for the license with the required documentation. The documents you will need are the following:

• -Duly filled application form
• -Copy of your passport and your partners, if you have one
• -Two color photos of the same size as those in the passport

In this case, the most appropriate way to obtain this license easily is through the advice of an expert organization.

2.4 Apply for a visa

Apart from the license, you must process a work visa that will help you start your business in the country. For this, you must pass a medical examination required by law in one of the authorized hospital entities. In addition, thanks to this visa you will be able to sponsor your family members or a domestic worker.

However, this will be determined by the size of your franchise and other factors related to the business. The people you sponsor will also need to pass the same medical exam for their visa to be approved.

2.5 Franchise in UAE Agreement

Another important requirement that the process must meet is to establish an agreement with the franchising company. This is a legal contract that binds the associated parties in the franchise process. In this sense, this document must contain all the information, rules, and regulations between the franchisor and the franchisee.

In most cases, the document contains the following information:

• -Duration of the agreement
• -Duties and rights of each party
• -The rate
• -The selection of the place
• -Quality guarantees and training
• -Limitation of liability
• -Profit percentage
• -Intellectual property law
• -Conflict resolution

To make a draft that is under local laws you should have the legal support of a local lawyer. Once the document has been drawn up but before signing it, you will need to file it with a UAE court. In this way, you notify the authorities that you are starting a franchise UAE.

You should know that this contract is binding on both parties, so they must fully comply with it. Therefore, make sure that all the content is clearly stipulated.

2.6 Open a bank account

To do any type of business in the United Arab Emirates you must open a corporate bank account. Thus, do your research on existing banking institutions in the country. In this way, you can choose the bank that offers you the best benefit for your financial activities.

The UAE has large financial institutions and high-quality corporate financial services. Before opening a bank account you will need to collect the following information:

• -Business plan
• -Corporate documents of your franchise
• -Proof of residence in the UAE
• -Your resume
• -Corporate bank statement
• -Personal bank statement and that of your partners

The business plan should include your potential customers, suppliers, partners, business development plan, etc. All corporate documents allow you to demonstrate that you own legal business property. Additionally, the CV is included so that you can demonstrate your commercial and professional experience.

It is recommended that you start collecting all this documentation well in advance.

3. Why should you set up a franchise in UAE?

As we have said in a previous section, the UAE offers great opportunities in various economic areas. Therefore, it is an appropriate market to establish your franchise in UAE and enjoy the benefits it offers. The reasons that allow you to consider the country to establish your business are the following:

• -Through a franchise UAE, you can reduce your business marketing and advertising expenses. In this way, the establishment of this company is much easier for new investors.
• -It allows your business to be adequately supplied in a more accessible way, thanks to well-known distributors.
• -By partnering with a well-known company you will not have to fight the challenges of growing the business.
• -If you are the franchisee, you may have access to different products and services that are not available in any other situation. This is because the franchise already has what it takes to be successful in the marketplace.
• -Franchises in UAE allow you to have a well-known business name, thus reducing the risk of failure.
• -Another benefit you can get through franchising is staying up to date on best business practices. In this case, we refer to what is related to products and advertising.
• -Also, the costs of establishing a business through a franchise are reduced, which does not happen if the entire process falls on you.

Hence, the benefits of establishing your franchise are manifold and can increase more as you advance in this business.

4. How to choose the best UAE franchise?

If you are looking for a franchise in UAE you should do some proper research to make sure it meets your interests. This is a long-term commitment so you must find a person who will fully benefit you. The processes of the franchise, the constant support, and the terms of the agreement are points that you should consider when choosing.

Plus, there are a plethora of options and industries you can get involved with. Therefore, the selection process is not a simple thing but we have provided you with some concepts to choose more precisely.

4.1 Personal goals

Before starting or buying a franchise in UAE in any sector, you should ask yourself about the goals you are pursuing. It is important to consider what you want to achieve with this initiative, whether to earn money or advance your business career. In this way, it will be easier for you to decide whether a franchise will help you achieve your goals.

4.2 Shared expectations

Before signing any contract with a franchisor, you should know what this company expects of you and what you expect from the franchisor. In this way, they can reach an agreement that benefits both of them. Remember that this agreement binds you to the other company in the long term, so you must consider these aspects carefully.

4.3 Personal growth

The company must guarantee that they care about your franchise being successful and that it also helps you grow professionally. Some of these companies perform some tests to determine the willingness of franchisees to grow.

4.4 Check the reviews

One of the parts of the investigation is to learn about the results obtained by the company with which you want to work. This will help you to know the experience that the people involved with the company have had. In this way, you will be able to get an idea of the business practices of the business with which you will be working.

5. We advise you legally in franchising UAE

The franchise market is constantly advancing and growing due to the economic facilities in the Emirates. Many companies from various countries are establishing their franchises and taking advantage of what the UAE has to offer. In addition, the process is simple but it can take time due to the amount of documentation and processes involved.

However, we can help you comply with all the legal requirements so that everything is in order with your franchise. Our experience allows us to help you with this and other issues. These include the following:

• –Corporate business law
• –Family law
• –Criminal law
• –Commercial property
• –Divorces
• –Construction laws
• –Immigration laws
• –Financial laws
• –Labor law

Establishing a franchise in UAE is easy if you have the help of the best professionals. We can offer this at Connect Legal, just contact us through +971 433 16 688. In addition, you can request our legal advice by simply sending a detailed message to [email protected].