Franchising in the UAE‎: Is It for You?

Have you ever dreamt of running your own business in UAE. Are you thrilled at the idea working for yourself, but not by yourself? Then, you might consider franchising as the best option.

The UAE is very receptive to international franchising, a formula that assures growth potential in a booming market. Franchising activities are worth over 300 million dollars in the UAE and 13% of the population has investment capabilities of over 2 billion dollars total.  The retail, free time and service-oriented sector offer unique franchise opportunities to meet the needs of a growing market. In addition over 50% of retail sales regard international brands. In particular, the UAE is largely dominated by American brands with a significant share of over 70% and growing.

Is franchising for you? “To open a franchise in Dubai and the United Arab Emirates, you need to have a strong spirit of initiative, trust and passion,” says Roberto Scoppa of Dubai Blog, who notes “franchising is an option that more and more businesses should explore, whether large or small.” Franchising allows new business owners a way to start their adventure using the experience, name and, in part, resources of a larger brand. An investor with limited money, in fact, can quickly start the business following specific guidance and proposing a product that is normally already known and established.

Less resources, less responsibility, quicker setup are great advantages. Franchising increases the chances of business success. For companies with limited resources also in terms of staff, a franchise offers a low-risk way of expanding. Of course, a business owners needs to account for limited wiggle room and independence as franchising means also following the sometime strict guidelines of the brand.

As far as requirements, this is what needs to be known:

  • The affiliate must be an emirate or an entity that is wholly controlled by citizens of the United Arab Emirates;
  • The franchise agreement must grant exclusivity to all or part of the United Arab Emirates;
  • The franchise contract must be authenticated

Thinking of franchising your business in the UAE? If so, first of all it’s important to identify specific needs of the market and any competitors. A well-thought-out, detailed business plan is essential to serve as a blueprint guiding all subsequent actions.  Then it’s important to verify all pertinent legislations or rules to follow in the area where the new shops are planned. For example, if planning on opening a store in a mall, it’s important to learn of all rules and regulations associated with the lease contract.

What about opening a business in a free zone?

A free zone might be the best option for a business. In fact, UAE free zones allow foreign investors to retain 100% of their businesses without the need for a local partner. In addition,

They offer 0% corporate and income tax rate, no customs duties on imports and exports, and the option to repatriate 100% of the profits from the business. UAE free zones are often sector specific and may have specific advantages for business owners. Fujairah Creative Zone, for example, allows a business to have no physical space and to submit annual book-keeping.

It is important to talk to experts early in the process to prevent costly mistakes and ensuring a smooth transition to business ownership.  Gather as much information as possible and build your future right from the start.

Franchising in the UAE‎: Is It for You?

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