A franchising business opportunity might not seem like an exciting piece of work for many entrepreneurs. Whether you are a seasoned businessman or are stepping into the world of business for the first time, the franchise opportunity is for all. With an established brand, franchises offer franchisees the experience to taste the cake of running a business with all the necessary support systems and considerable help. Franchising is a proven viable opportunity to become a business owner. When a company sells rights to its existing business model, products, and/or services to another businessperson or company, it is said to be creating a franchise. Some of the biggest franchise names include McDonald’s, Starbucks, KFC, etc. With an annual growth rate of 27%, the franchise market is markedly one of the fastest-growing non-oil markets in the Middle East.

Running franchising is by no means an easy task. However, with the right support system and expert consultants to guide you, starting your franchise in Dubai can be smooth and straightforward.

Step by step guide to franchise a business in the UAE

Due to the relative ease of doing business in Dubai and the western friendly culture, there is a strong history of international businesses expanding their brands through the franchise model in Dubai. Dubai, one of the seven emirates of UAE is heavily reliant on the tourism industry spiked with state-of-the-art shopping malls, hotels, and tourist attractions, most of which are international franchises. Like in most countries, there are several ways for establishing a franchise in Dubai either by setting up a new company or acquiring an existing company or merging with another company. The main benefits of a franchise business are strong brand recognition, an already established customer base, a successful track record of the well-developed brand, and training and operational support. With the steady inflow of new international brands stepping into the Dubai market, many local companies are actively seeking to be a franchise. We will put down the steps required to start a franchise in Dubai:

Conduct in-depth market research

The first step in establishing a franchise business in Dubai is to conduct in-depth market research on various other franchise brands in the chosen industry in Dubai. If you have not yet chosen the industry, you will need to study the market and find the most lucrative business niche in the current market situation in Dubai. Also, consider the one that best aligns with your interests, business goals, knowledge, and expertise.

Once you have chosen the industry, you need to review the most trustable brands well-established in Dubai. Conducting due diligence on the chosen brands, going through reviews and testimonials from previous and existing franchisees will help gather relevant information regarding the brands before you decide. In the case of well-recognized international brands, it is important to consider the marketing prospectus and the Franchise Disclosure Document (FDD). The FDD outlines the company financials, franchising rules, franchising fees, franchise responsibilities, etc.

Create a Smart Business Plan

You will need to make a business plan covering actively seeking all aspects of your franchise – target market, competitor analysis, market development in your line of service, core competencies, financial plan, marketing plan, funding alternatives, etc. Your FDD will contain all the vital information that will be needed to create a business plan. You can also include information like the company’s history and corporate background, a description of the target market, the competitive advantage of the product/service, marketing initiatives, plus the start-up and ongoing costs. You can seek the help of your franchisor to write a business plan.

Fulfill all Legal Requirements

To start a franchise in Dubai, the following legal requirements must be met:

·   If your franchise business zone is in Dubai Mainland, you will need a local sponsor. If your business is in the Dubai Free Zone, you will not require a local sponsor. Without a local sponsor, you can operate your business only in the free zone. Free zone business owners can retain 100% ownership of their company. The license and setup type required by a company may depend upon several factors. A local expert consultant can help guide you to choose the best options considering the uniqueness of your franchise setup.

·   You can choose to register as a company or a sole trader while starting a franchise in Dubai

·   You need to obtain a trade license for your franchise business.

Prepare a franchise agreement : A franchise agreement must be prepared and signed by both parties. It is the legally binding contract between the franchisor and the franchisee that contain all the rules and regulations. It includes initial upfront fees, percentage of profit share, intellectual property rights, advertising, and more. This agreement needs to be disclosed before the Dubai court.

Register your Franchise Company Type: The Dubai Trade Register recognizes the setup of two kinds of franchises:

·   Single-unit franchise – The franchise will sell and distribute the products and services of the franchisors through a single company.

·   Multi-unit franchise – The franchise shall open several spaces to sell and distribute the products and services of the franchisor but will operate through a single company

Other requirements

You will need a business license to work in Dubai. A UAE business license holder can apply for visas for their family members as well. The size of your franchise company, its setup, and earnings decide the number of family members that you can sponsor.

Corporate Bank Account: You will need to open a corporate bank account in Dubai to operate a franchise.

How YRC can help you to franchise your business in the UAE

Setting up a franchise in Dubai, though straightforward, is not an easy task. You will need to be equipped with substantial market knowledge, expertise and be aware of all the prevailing rules and regulations to set up a franchise in Dubai. If you are looking to set up a franchise in Dubai but are unsure how to set on the right path, then YRC can help guide you with all the required information. YRC is a team of expert financial consultants and advisors who are passionate about bringing the dreams of aspiring entrepreneurs to life. YRC can help assist you in every step of the franchise formation, from opening the bank account to getting your company registered in the Dubai Trade register. With years of experience and expertise helping clients establish a successful and sustainable franchise network, we focus on building a cost-effective and simple franchise model. We work with clients to adopt a suitable franchise strategy that utilises their unique selling points and establish a compelling brand value and operational model to attain their goals.