The United Arab Emirates (UAE) should be a jurisdiction of interest for franchising companies due to its strategic geographic location, business-friendly regulatory environment, tax incentives and growing population.

With an economy estimated to be in excess of US$545 billion, the franchise market is projected to grow by over 5% annually over the next five years with increasing diversification across industries. Notably, key sectors driving the UAE’s franchise economy include luxury retail, hospitality and catering, wellbeing and fitness outlets, and education.

Legal considerations

While franchising is not separately legislated, it is treated under the broader umbrella of "commercial agencies" per Federal Law No. 3/2022 on the Regulation of Commercial Agencies (UAE Agency Law), which repealed UAE Commercial Agency Law No. 18 of 1981. Additionally, general laws such as contract law, competition law and intellectual property law apply.


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Franchising arrangements fall into one of two categories: ‘registered’ franchise arrangements, governed by the UAE Agency Law, and ‘unregistered’ franchise arrangements, governed by general UAE contract law.

Registered franchise arrangements are those registered with the Ministry of Economy (MOE) and fall within the scope the UAE Agency Law. The UAE Agency Law provides local franchisees with additional protections around termination, non-renewal and compensation rights. For this reason, registered agency agreements tend to be more attractive for local agents (the franchisee) and less attractive to foreign companies (the franchisor). It is mandatory for certain categories of products in key industries to be subject to registered status, however, certain criteria need to be met for an agreement to be registered, including:

  • the franchise contract must have been formally registered with the MOE;
  • the franchise contract must have been in writing and translated to Arabic;  
  • the franchisee must generally be a UAE national or a company at least 51% owned by UAE nationals; and 
  • the franchise contract must have been notarised.

Unregistered franchise arrangements are governed by general contract law, including the UAE Civil Code (Federal Law No. 5 of 1985, amended by Federal Decree-Law No. 30/2020) and Commercial Code (Federal Law No. 50/2022). These contracts do not have to be registered with the MOE and fall outside the scope of the UAE Agency Law. For this reason, the terms of unregistered agreements can be more flexible and are generally less restrictive, making it an attractive option for foreign franchisors and investors.

The UAE Competition Law, particularly under the updated framework introduced by Federal Decree-Law No. 36 of 2023 and Cabinet Ministerial Decree No. 3 of 2025 (UAE Competition Law), also applies to franchises operating within the UAE and to activities abroad that affect competition within the UAE. Franchise agreements that include exclusivity clauses, resale price maintenance or territorial restrictions may be scrutinised under the Competition Law for potentially restricting market competition.

There are no specific unofficial codes or standards for franchising in the UAE. However, industry associations and individual companies often provide feedback to governmental authorities such as the Ministry of Industry and Advanced Technology (MOIAT) as they develop and implement new standards. 

Structure and set-up

As an overarching principle, a company can only ‘do business’ in the UAE it if has a corporate presence in the region, or if it has appointed a local agent, such as a franchisee. A franchisor can therefore be a foreign or domestic entity: there is no requirement for the franchisor to be a local entity or wholly owned by UAE nationals.

Unlike the franchisor, the franchisee must have a corporate presence in the region in order to operate. Franchisees are often incorporated as limited liability companies in the UAE, however, there are multiple entity structures and so the specific entity type will be dependent on the nature of the franchisee’s operations. 

Additionally, the UAE is made up of multiple 'free zones' in addition to the UAE mainland, so the jurisdiction of incorporation of the franchisee would be dependent on the specific activities to be undertaken by the company, and the location of those activities.

Non-compete obligations are allowed and legally enforceable in the UAE during the franchise term and after, provided they are reasonable in terms of duration, geographical scope and the nature of the activities prohibited. In practice, however, they face serious challenges to prove and pursue, including regarding available remedies and compensation. These risks can be mitigated through careful drafting in the franchise agreements. As for the franchisor’s know-how, it is possible to include standard indefinite restrictions or clauses on using any franchisor know-how in any similar or competing business.

The UAE Competition Law prohibits the franchisor setting a minimum price at which franchisees must sell products if this is considered retail price maintenance (RPM). 

In a franchise system, it may be possible to justify RPM where necessary to organise a coordinated short-term low-price campaign to support the entry of a new product or service into the UAE market. 

Recommended retail prices are allowed to be provided to the franchisee by the franchisor. However, in all circumstances the recommendation should be genuinely non-binding; when communicating prices to consumers such prices must be clear and not misleading or confusing for the consumer in line with local consumer protection laws; the recommendation should not be accompanied by pressure, coercion or incentives placed on the franchisee to adhere to the RRP such as threats, penalties or bonuses; and the franchisee should remain free to independently set its own pricing.

Some additional rules apply to registered franchise arrangements.

Under the UAE Agencies Law, franchise activities may only be carried out by a UAE national, a UAE public joint-stock company (PJSC) owned by at least 51% UAE nationals, a private company owned by a PJSC owned by at least 51% UAE nationals or a private company wholly owned by UAE nationals.

The UAE Agencies Law stipulates a minimum contract term of five years if the agent or franchisee is registered with the MOE. It is required to establish showrooms, buildings, commodity stores or maintenance and repair facilities, unless agreed otherwise between the parties. There is no maximum permitted term prescribed by law for any related agreement.

While there are no mandatory imposed rights in relation to automatic renewals of an unregistered franchise agreement at the end of the initial or a subsequent term, if the franchise agreement is registered as a commercial agency under the previous Agencies Law, the franchisor may be liable for compensation if non-renewal occurs by the franchisor’s decision without a legitimate cause, even if the franchise agreement term is fixed under the contract terms. This has changed under the new UAE Agencies Law, and the franchisor may terminate the relationship for several reasons, explicitly including “the expiry of a limited term of agency contract”. 

Certain franchise agreements in key industries, such as oil, defence and pharmaceuticals, must be registered with the MoE and would fall within the scope of the UAE Agency Law. 

Outside of these key industries, franchise agreements do not need to be registered with any local authority. If the parties wish to register a franchisee as a commercial agent, they can do so and must submit an application for registration in the commercial agent’s registry at the MoE with a written and notarised contract, translated into Arabic.

If the franchise agreement is to be registered at the MoE, it must be written in or translated into Arabic, notarised, and legalised. 

Pre-contract disclosures are not mandatory under UAE law, and there is no requirement for franchisors to provide a franchise disclosure document or register it with any government authority. There are no specific disclosure obligations in the initial stages of the franchise relationship or throughout the duration of the agreement, apart from what parties agree contractually.  

However, the MOE may have additional requirements for registered franchise arrangements.

Intellectual property

Trade marks in the UAE are registered with the Trademarks Department at the MoE. Registration may be carried out directly with the MoE, or via a centralised application filed with the World Intellectual Property Organisation (WIPO), which is available since the UAE became a member of the Madrid Protocol.

Most franchise agreements include trade mark licenses to authorise use of a brand. Licenses of trade marks registered in the UAE may be recorded at the Trademarks Department, and parties often opt to do so to help prove trade mark use and entitlement to limited trade mark rights.  

Following filing of an application, the mark will be examined by officials against the conditions of the Trademark Law (Federal Law No. 36 of 2021). If the registration is accepted, the MoE will publish the trademark in the Trademark Bulletin and any interested party may file an objection within 30 days. 

Once registered, trade marks are valid for a period of 10 years from the application date and can be renewed for further 10-year period.  

If a trade mark is infringed, the owner may request an order from the Magistrate of Summary Justice at the UAE Civil Court to take provisional measures including seizure of infringing materials, prevention from entering goods into commercial channels or exporting, and evidence preservation. A trade mark owner incurring damage resulting from the infringement may also file a suit with the Civil Court for financial compensation. 

A trade mark in the UAE is vulnerable to cancellation on the grounds of non-use. An interested party may seek cancellation of a registered trade mark on the basis that it has not been used consecutively for a period of five years following its registration. Consequently, many franchisors and franchisees opt to register the corresponding trade mark license with the MoE to show use of the mark by the franchisee.

Other IP protections relevant to franchises and available in the UAE include confidential information and trade secrets, copyright, design rights and patents.

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