How to Open a Franchise in the UAE?

by Zaara 13, Jan 2021

How to Open a Franchise in the UAE?

Setting up a business with the backing of a successful and reliable brand is the perfect way to financial freedom. You can get many benefits like operational support, brand recognition, and a proven track record. Nevertheless, conducting proper research is also necessary for all aspects of launching such a business.

To help, we’ll walk you through the procedure of opening a franchise.

What is Franchising?

In simple terms, franchising is a method of doing business to get expansion and distribution in the market. A franchise is like a license for speedy expansion, brand recognition, and offering a consistent method for delivering the brand’s promise.

Franchise business starts when the products or services become a big brand and gain some values, then other investors want to repeat its established concept. Once the business becomes a brand, then the business owner becomes a franchisor.

In the UAE, there are various ways of setting up a business. However, from the past few years, significant changes have occurred in the market and the UAE business environment. One such change is the franchise business setup.

Franchising in Dubai

Opening a franchise in Dubai is based on the relationship between the franchisor and the franchisee. Franchise business in Dubai is just not limited to a fast-food franchise, and it can be anything. From entertainment, cafe, cleaning, education to travel, and consulting. The Dubai Chamber of Commerce has issued a document that provides the regulations related to opening a franchise business in Dubai.

Types of Franchise Business in Dubai

The Dubai Department of Economic Development (DED) classifies franchises into two distinct classes:

  • Single-unit franchise: The franchisee will sell products or provide services of the franchisors through a single company
  • Multi-unit franchise: The franchisee will open several sites which will be controlled by a single company.

It may seem self-explanatory why one would follow one model over the other. It’s still best to speak to a professional consultant over which model you should follow.

Benefits of Franchise Business Setup in Dubai

  • Freedom of employment
  • Proven brand, trademark, recognition
  • Industry know-how
  • Reduced risk of failure
  • Bulk buying advantages
  • Access to proprietary products and services
  • On-going research and development
  • Shared marketing, advertising, business launch campaign costs
  • Proven product or service outcomes

Procedure to Open a Franchise Business in Dubai

The first step of setting up a franchise business in Dubai is to conduct a market survey. Even if it not compulsory, it is advised to ensure the success of the company. Concerning the legal requirement for creating a franchise, the entrepreneur or an investor must take into account the following -

  1. A local sponsor is needed if the franchise business is set up in Dubai Mainland
  2. The investor can register a company or a sole proprietorship when setting up a franchise business
  3. A franchise agreement must be prepared and signed by both the parties upon the opening of the franchise

One of the principal reasons people turn to start a franchise business is the support of a well-developed brand. Some brands have dedicated real estate contractors, extensive operations, banking contacts, human resources, and marketing teams that will make your company launch significantly easier.

Local businesses are more enthusiastic about engaging with internationally recognized brands. This, in turn, makes it easier to initiate a working relationship even if your business is the first foray of the franchise in Dubai.

Although franchising isn’t for everyone, it can be an excellent means to success for anyone who wants to own a business.

We at Commitbiz can assist you in opening a franchise business in the UAE. Our consultants are well-versed with the legal proceedings and can make the setup hassle-free. Get in touch with us for more information.