Franchising in Dubai
The UAE is known worldwide as a bastion for business, with commercial regulations that make operating an enterprise in the region easy, straightforward, and profitable. Business owners here are given the advantages of relaxed visa restrictions, limited tax responsibilities, and a business-friendly environment.
And one such business tactic is to open a franchise. International franchises are becoming a popular aspect of Dubai culture. From food delivery services to restaurants, retail establishments, and convenience stores, forming a franchise can be highly lucrative for entrepreneurs.
However, operating a franchise does come with specific laws and regulations of which investors will need to be aware. If you’ve considered purchasing a franchise in the UAE and want to know more, we can help! Below, we’ll walk you through everything you need to know about opening a franchise.
What Exactly Is a Franchise?
A franchise is a method of distributing products or services through a franchisor. This franchisor pays a royalty to establish a company using the brand's trademark, business techniques, and trade name. This contractual arrangement binds these entities together as a franchise.
In the UAE, there are several types of franchises available. These include:
1. Single-Unit Franchise
A single-unit franchise is a company that sells the products and services of the parent company through a single legal entity.
2. Multi-Unit/ Developed Franchise
This type of franchise operates several establishments under the control of a single company.
With franchising being worth an estimated $30 billion and annual growth of 27%, it's one of the fastest-growing business models available.
Steps for Forming a Franchise in Dubai
With Dubai being the central focus of many investors and entrepreneurs, it’s no surprise that many franchises find their way to this city. If you're a foreign investor that's interested in starting a franchise in this region, there are several essential steps you'll need to take.
1. Research Your Market
A comprehensive grasp of your product, the competition, and the market forecast will empower you with the tools you'll need to develop your product and brand properly.
2. Understand the Type of Franchise You Plan to Start
Are you forming a single business entity, or will you establish several business wings for a larger franchisor? This is crucial in determining how you'll approach your new business model.
3. Choose a Company Name
Under normal circumstances, you’d have free rein to name your company as you choose, but with a franchise, you’ll have to abide by a strict set of rules and regulations. You’ll need to coordinate with your franchisor regarding their specific naming guidelines.
Beyond those rules, any name submitted to the Department of Economic Development (DED) must ensure that your trade name does not include profanity, other well-known company names, and abbreviations.
4. Securing Your Business License
At this point, you’ll need a trade license for business registration in Dubai. And depending on whether you choose to form your business in Dubai's Mainland or one of its many Free Zones, your application process may differ slightly. Hiring business setup consultants familiar with conducting franchise-related companies is beneficial for many investors.
However, if you choose to go through the process independently, you'll need to submit your license application and several required documents. These documents include:
- Completed application form
- Two color passport-sized photos
- Copy of passport for the business owners.
After applying with your documentation and paying the required fees, you'll receive your business license. This license will grant you the ability to conduct business in the jurisdiction you choose within the UAE.
5. Apply for Visas
To operate a business in the UAE, you'll need a visa. The maximum number of visas you'll be able to apply for will vary depending on your company's size, earnings, and your dependent's visas. Business consultant experts like MSZ Consultancy can help you navigate this process if you're unfamiliar with the territory.
6. Opening a Bank Account
After securing your business license, your next step will be to open a corporate bank account. This bank account will allow you to exchange goods and currency. To open a bank account, you’ll need to provide the following information:
- A completed CV
- Proof of residency
- Corporate bank statement
- Personal bank statements for the last six months for you and any partners
- A business plan
The Benefits of Operating a Franchise Business in the UAE
There are many benefits of forming a franchise business over a standalone private company. These include:
1. Shared Advertising, Marketing, and Business Costs
Unlike a personal business enterprise where all business expenses fall to you, a franchise will allow you to minimize your costs. After all, the branding, logo design, and market are already taken care of. Reducing these expenses make business formation easier and more friendly for new investors.
2. Industry Knowledge
Since larger businesses have already worked out the kinks of operating a business in your sector, you won’t have to go through the growing pains of forming your own business.
3. Bulk Buying Advantages
You'll be able to purchase your supplies from known distributors, making the process of keeping your business stocked more accessible and inexpensive.
4. Reduced Risk of Failure
Since your business will carry a familiar trade name, you'll not only have a built-in market but also be at far less risk of failure.
5. Access to Proprietary Products and Services
Franchises will often come with their own tools, methods, and tactics that have helped them succeed on the international stage. And by being a franchisee, you’ll have access to products and services that otherwise would not be available to the public.
6. Ongoing Research
Since you'll operate under the banner of a larger corporate entity, all the R&D will be handled for you. As such, you'll always be aware of the company's best practices in terms of advertising and products.
7. Shared Business Launch Costs
Forming any company is expensive. But by operating as a franchise, many of these expenses will be shared or provided outright, significantly lowering your business setup cost.
Start Your Franchise the Right Way with MSZ Consultancy
With years of experience assisting investors and business owners in managing franchises and personal business operations, MSZ Consultancy can take all the stress and hassle out of the business formation experience. From business setup in Dubai to secure the help of a Public Resource Officer, we do it all!
Are you seeking help with your visa application process? We can help! Do you need assistance handling significant business renewals and staying abreast of ever-changing regulations? We have the know-how!
MSZ Consultancy has helped thousands of entrepreneurs navigate the ins and outs of conducting business in the UAE. And we can help you!
It doesn't matter whether you're a single investor or part of an established corporate entity; we've got you covered. By streamlining your business processes, we can help you make operating your company enjoyable and hassle-free.
Give us a call today at +971 50 487 2208 for a free quote and to find out how we can help you maximize your business potential!
