Franchise business in Dubai, UAE is a great opportunity for entrepreneurs and investors. The city’s vibrant and diverse economy offers excellent potential for success, with the right franchise model in place. There are many different franchise models available in Dubai, ranging from fast-food restaurants to retail stores. The government of the UAE also provides incentives for businesses that set up shops in the city, offering grants and tax breaks.
There is plenty of support from local authorities to help guide businesses through the process of setting up a franchise business in Dubai, UAE. With the right strategy and dedication, owning a franchise business in Dubai can be an advantageous experience.
If you are interested in setting up a franchise in the UAE, stay with us. In this blog, we have covered all the registration and application processes for opening a franchise business in Dubai.
What is a Franchise in Dubai?
A franchise company setup in Dubai is a great business opportunity for entrepreneurs. It is a type of agreement that allows an individual or company to operate a business using the name and products of another business.
The franchisee, or the person who holds the franchise agreement, pays an initial fee to the franchisor and also signs a contract that outlines their relationship.
This agreement also typically includes royalties, marketing fees, and other costs associated with running the franchise.
In Dubai, franchising is growing rapidly as it offers numerous advantages such as access to established brands, proven systems and processes, and support from experienced professionals.
With the proper planning and support, owning a franchise in Dubai can be a very rewarding investment for entrepreneurs looking for an exciting new venture.
The different types of franchise businesses in Dubai
The Dubai economic development department is also known as DED has divided the franchise business in Dubai into two main categories. The DED is a national authority that is responsible for issuing all trade licenses to businesses in the UAE.
This type of franchise allows the franchisee to market and sell the product or service from the franchisers through a single company
This type of franchise allows the franchisee to sell products or services from the franchise through multiple sites. But the business operations will be looked after by a single company.
What are the requirements for opening a franchise business in Dubai?
Opening a franchise business in Dubai can be an exciting but complex process, so it’s important to conduct adequate franchise market research, planning, and preparation. You can also take help from Vigor business setup consultants if you need guidance during the process.
- Start with learning about the franchisers. Get reviews and testimonials from franchisees who are doing business with them in the UAE or outside of it. You will also get a franchise disclosure document from your potential franchisers. The document will help you understand all the regulations related to opening a franchise business in Dubai including fees, and other financial aspects.
- You will need to select the right franchise opportunity that best suits your needs and goals. You will also need to become familiar with Dubai’s local laws and regulations, as well as check with the Department of Economic Development (DED) for any relevant licensing requirements.
- You must have enough understanding of financial institutions to cover initial costs such as franchise fees, store setup, hiring staff, and purchasing inventory.
- Once these steps are completed, the franchisor will need to file paperwork with DED before the business can be opened officially.
- Depending on the type of business, it may also require additional approvals from various government departments or regulatory bodies.
- If you are opening your franchise in Dubai mainland, you need to get a local sponsor on board.
6 Steps to Open a franchise business in Dubai
Starting a franchise business in Dubai can be an exciting endeavor for entrepreneurs. The steps to open a franchise business in Dubai are as follows:
First Step: choose the franchise
It is the job of every entrepreneur who wants to open a franchise business in Dubai, to do thorough research. Choose the franchise type. Read the franchise disclosure document and understand the company of whom you want to open the franchise.
Second Step: Business plan
To open or buy a franchise business in Dubai, you need to have a comprehensive business plan. The business plan should elaborate on your goals, and business activities related to the business. Your competitor’s analysis, market research, investment plans, and precautions and management to deal with potential risks to the business.
Third Step: Trade license
Now you have to find the right jurisdiction for your franchise business. The Dubai government offers two main land options to all the businesses in Dubai.
Dubai free zone and Dubai mainland. Both of these locations have different advantages and limitations. Only after choosing the location, you can apply for the trade license as the trade license is different for both the free zone and the mainland.
If you will want to open a franchise business in Dubai mainland, you need to hire a local sponsor for your business. While on the other side, for the free zone, you enjoy complete ownership of your franchise as you don’t need to hire a local sponsor.
To apply for the UAE business license,
- Make sure the trade license application is complete
- Provide a copy of the passport of you and your shareholders if you have any
- Two passport-sized pictures
Step four: visa application
After applying for the license, being a foreign investor or business owner, you need to get a residency visa from the UAE to officially start your franchise business in Dubai. With this visa, you can also sponsor your family and hire staff if required.
To apply for the visa, you have to take medical exams.
Step five: preparing a franchise agreement
After the license and visa application, now you have to get a franchise agreement. It is basically a legal contract between the franchisor and the franchisee. And in there, is information related to the rule, regulations, and company policies between the two partners. The following will be the information in the agreement:
- The duties and the expectation
- Duration of the agreement
- The franchise fees
- Quality inspection
- Profit share percentage
- Intellectual property rights
This agreement will be signed by both parties and will be disclosed in front of the Dubai court to inform the state that you are opening a franchise business in Dubai. Involving a lawyer while preparing the franchise document will be helpful and according to Emirates regulations.
Step six: opening a corporate bank
Opening a corporate bank account is important to run the financial elements of a franchise business in Dubai. There are many corporate banks in Dubai, UAE. Find the one that suits your business side and is likely to offer you corporate banking services which are beneficial such as support and privacy.
The following are the documents you need to open your corporate bank
- Your cv
- Business plan
- Your billing addresses
- Past six months of bank statements of yours.
Benefits of having a franchise business in Dubai, UAE
The benefits of having a franchise business in Dubai, UAE are numerous.
First and foremost, it is an ideal location for a business due to the rapidly growing economy and highly developed infrastructure. Many businesses also benefit from the strategic location of Dubai since it serves as a hub for trade between Europe, Asia, and Africa
With its low taxes and a free-market economy, there are many opportunities to make profits as well as to expand the business.
Dubai has a large population of ex-pats which makes it easier to find potential customers and suppliers. The city offers excellent networking opportunities with other businesses and investors from around the world.
Choose the right franchise business in Dubai
If you really want to open a franchise business in Dubai, you need to do heavy research on which franchise businesses are in profit in the middle east and especially Dubai. During the whole process of research and registration, you can get overwhelmed, and burned out.
To avoid that, contact the Vigor business setup consultant team. Our expert team can help you from finding a lucrative franchise business in Dubai to making the business plan and registering it to the DED so you can get your business license on time and can start your franchise business in Dubai on time and without any hassle.