The franchising market in Qatar is expanding rapidly, driven by the country's high per capita income and a reformed regulatory framework, resulting in an increase in foreign investment.
Key sectors include retail and education and food and beverage, with the latter accounting for over 40% of franchise businesses. The market has been further boosted by events like the FIFA 2022 World Cup, which increased consumer spending and demand for international brands.
The Qatar National Vision 2030 also aims to diversify the economy beyond oil and gas, thereby creating more opportunities for franchising.
Legal considerations
Qatar does not have a specific franchising law. Instead, franchising arrangements are governed by a combination of the Commercial Companies Law No. 11 of 2015, the Commercial Agency Law No. 8 of 2002, the Civil Law No. 22 of 2004 and general contract law. The Commercial Agency Law is particularly relevant as it often treats franchisees as commercial agents when the franchise agreement meets the legal definition for a commercial agency. As a result, many franchise agreements deliberately avoid this classification to retain flexibility and avoid mandatory registration.
Apart from these laws that together form the general franchising framework, the Qatari Anti-Competition Law No. 19 of 2006 may also apply, dependant on the size of the franchise and its effect on the relevant sector.
There are no specific unofficial codes or standards for franchising in Qatar. However, the Qatar General Organization for Standardization (QS) is the national body responsible for developing and publishing standards more generally. QS is a member of a number of international standard organisation bodies such as the International Organization for Standardization and the Gulf Cooperation Council Standardization Organization which, in turn, also require businesses operating in Qatar to comply with the majority of international standards and practices.
A franchisor can have any legal form, including a limited liability company (LLC). There is no requirement for the franchisor to be a local entity or be wholly owned by Qatari nationals.
A franchisee can also have any legal form, with LLCs being the most common. Depending on the industry and economic activities of the franchise, the franchisee may be required to partner with a Qatari national. However, following reforms introduced under Law No. 1 of 2019, Qatar permits up to 100% foreign ownership in many sectors, subject to approval from the Ministry of Commerce and Industry – which is more commonly granted with the aim of expanding the scope of foreign investments. Where such approval is not granted for activities that fall within restricted sectors, the franchisee may be limited to owning up to 49% of the shares, with the remaining 51% held by Qatari individuals or entities.
Non-compete obligations may be imposed for the duration of the franchise term and for a limited period after its termination, provided they are reasonable in scope and duration. Non-compete clauses must comply with the broader Qatari competition laws to ensure that they do not unfairly restrict trade.
Franchisors in Qatar are generally not allowed to set fixed or minimum resale prices on franchisees, however, they can recommend or set maximum resale prices.
There are no specific restrictions on the term length or renewal length of franchise agreements in Qatar. These terms are typically negotiated between the franchisor and franchisee. Accordingly, the franchise agreement must have clear duration, renewal, extension and termination provisions.
Franchise agreements do not need to be registered with a local authority in Qatar, unless the parties have established a commercial agency. If it has, the agreement will need to be registered with the Qatari Ministry of Commerce and Industry (MOCI).
All franchise documents must be duly notarised where necessary, and executed in Arabic or translated into Arabic by a certified legal translator. This includes the franchise agreement and any supporting documents. Where the documents are bilingual, the Arabic version will be used if there are discrepancies between the two.
There is no specific requirement for franchisors to provide a franchise disclosure document (FDD) in Qatar. It is common practice, however, to provide sufficient disclosures prior to entering into the franchise agreement.
Franchise operations in Qatar are subject to the Consumer Protection Law No. 8 of 2008, which safeguards consumer rights and promotes fair commercial practices. The law mandates transparency in advertising, accurate labelling, and the provision of warranties and after-sales services. Franchisees must ensure that goods and services meet declared standards and that consumers are not misled or exposed to unsafe products. Violations can result in administrative penalties, fines, or even criminal liability. MOCI actively monitors compliance and provides channels for consumer complaints and dispute resolution.
Intellectual property
Intellectual property rights are primarily protected under the Law on Trademarks, Commercial Indications, Trade Names, Geographical Indications and Industrial Designs No. 9 of 2002, Law on the Protection of Copyright and Neighbouring Rights No. 7 of 2002 and the Patents Law No. 30 of 2006.
Trade marks must be registered to be protected in Qatar. This may be done directly with MOCI, or via a centralised application filed with the World Intellectual Property Organisation (WIPO), which is available since Qatar became a member of the Madrid Protocol.
IP rights are enforced through the Qatari courts and violations may result in criminal penalties, ranging from administrative fines to imprisonment. Where damage or loss has been or is likely to be suffered, the IP rights holder may commence civil proceedings for precautionary measures or monetary compensation.
In addition to trade marks, Qatar offers protection for copyrights, patents, industrial designs and trade secrets.
Qatar is also party to the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, Convention establishing the World Intellectual Property Organisation, the GCC Patent Law Treaty and the Patent Cooperation Treaty.
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