There are many ways of starting a business in Dubai, among the most employed one being setting up a new company, buying an existing company or merging with another company. These are the most usual ways to opening a Dubai company, however, the last few years have brought significant changes to the UAE business environment. One of these changes refer to the introduction of a new method of doing business in Dubai and the rest of the emirate: the franchise business.
The Dubai Chamber of Commerce has even issued a document which provides for the regulations related to setting up a franchise business in Dubai. Our company formation consultants in Dubai can offer information on the creation of a franchise agreement.
Requirements for creating a Dubai franchise company
The first step for opening a franchise business in Dubai is to carry out a market survey. Even if it is not mandatory it is recommended in order to ensure the success of the company. With respect to the legal requirements for creating the franchise, a foreign investor must take into account the following:
- a local sponsor is required if the franchise business is located in Dubai mainland;
- the investor can register a company or a sole trader when opening a franchise business;
- a franchise agreement must be prepared and signed by both parties upon the opening of the franchise.
The franchise agreement will provide for the rights and obligations of both the franchisor and franchisee.
Our company incorporation agents in Dubai can assist with the registration of the company used to set up a franchise business.
Types of franchise companies in Dubai
We mentioned earlier the creation of franchises in Dubai, however, investors can also set up this type of venture in Dubai’s free zones without the sponsorship requirement. However, the free zone franchise company will only operate in the free zone.
The Dubai Trade Register recognizes two types of franchises:
- the single-unit franchise where the franchisee will sell or distribute the products or services of the franchisors through a single company;
- the multi-unit or developed franchise which implies the franchisee to open several spaces which will be controlled by a single company.
If you are interested in starting a franchise business and need more information on this system or assistance in setting one up, please contact our Dubai company formation advisors.