Opening a franchise in Dubai has pick up speed with lots of international and domestic brands knowing the importance of the model. Now the question is when to start Opening a franchise in Dubai. Franchise business start when the products or services become a big brand and gain some values; then other investors want to repeat its established concept. Once a business becomes a brand then the business owner becomes a franchisor. In the franchise model, the business man sells the rights to other people like him. The franchisor gets up-front fees from the people who wish to do the same business and using his brand as well as his logo. The initial fee also includes training and equipment support. Additionally, the franchisor also receives a percentage of profit shares; that is from its franchisee from time to time as agreed upon by both parties.
Opening a franchise in Dubai is a business model to expand the business in a market. Franchising is a way of business that is gradually growing; and accounts for more than one-third of the world’s retail sales. A franchise acts like a permit for fast growth; It is also a brand’s recognition and offers a reliable system to carry your brand‘s promise. Opening a franchise in Dubai is based on a business relationship between the franchisor and franchisee. In this article we will discuss that what is franchising; how it works, why franchising is growing as a way of doing business; also what makes a good franchise? Apart from a simple concept of franchising; we will also considers the benefits of franchising; and provides basic guidance to allow businesses to benefit from innovation.
Opening a franchise in Dubai is not limited just to fast food franchise in Dubai. There are now franchises for mentoring managers and sports people and franchises for online shopping. In the future the economy of Dubai will more likely be filled by new and creative franchises; which seek to exploit on their market lead and intellectual property advantage.
Fast food franchise in Dubai and other UAE Franchise opportunities
The market of Fast food franchise in Dubai is dominated by American brands and French brands. The scenario has started to change as most of Pakistani and Indian brand in food are coming to Dubai for food franchise in Dubai; and also the opportunities are available in varied sectors; and many Asian franchisers are entering the market. Until now, the Dubai franchise market has seen control of few big retail firms having multi brands in their portfolio; and mostly the Master Franchisee engagements; but now the trend for small franchisees and sub franchising is picking up.
As there is no specific law for UAE Franchise opportunities; there for general contract and commercial law is applicable to franchises contract in Dubai. Also, the principles of Sharia law apply to commercial contacts in the Emirate. As per the UAE law, only UAE citizens or companies wholly owned by UAE citizens or those with a UAE sponsor are allow to do this business. Therefore, due diligence on part of franchiser for normal laws and also while selecting the local sponsor. Furthermore, the franchise agreement needs to be disclosing before a Dubai court.
Currently, UAE Franchise opportunities are in fast foods, restaurants, soft drink bottling; also auto leasing, apparel, hotels, toys, beauty products, jewelry, photography; also vending machines, dry cleaning, hardware stores, furniture, office supplies, natural health products; publications, quick printing as well as florists; sport goods, retail stores, maid as well as personal services. Today, the biggest sector in this business is Fast food franchise in Dubai with most major US fast food Company.
Option for Opening a franchise in Dubai
There are two main options for Opening a franchise in Dubai. First, is a product distribution franchising. The second, is a business format franchising.
In a product distribution franchising, the franchiser make the products and the franchisee just sell that product. In this case, products need some groundwork and post-sale service. Also i n product distribution franchising there is a solid proof of identity with your brand. For example, products that are typically franchised are soft drinks, automobiles.
Business format franchising is known as a system of delivery which is more important in the product distribution franchise. This is more establishing in the restaurant, hospitality and leisure businesses.
Agreement for Opening a franchise in Dubai
The agreement for Opening a franchise in Dubai is an agreement between two parties; where a franchisor license the franchisee, in exchange for a fee. The franchise system is usually a package together with the intellectual property rights, such as:
- Trade name as well as logo
- competitive advantage as well as goodwill associated with the business
- Own the rights to use the trade mark
- Own the rights of any creations such as patents or designs as well as trade secrets
- Expertise of the business and any relevant lists
- Copy-righted works linking to the production,
- Sale of goods as well as the delivery of services to clients
It is suggested that you look out for your IP which is unique to your corporate and provides your firm with its competitive benefit and market place.
How to Open a New Franchise in Dubai
There is no special law for franchising in Dubai. A common agreement as well as commercial law is applied to franchising. UAE law orders that only UAE national or UAE local wholly own company or those with a UAE sponsor are allow doing business. But note that Businesses located in the UAE free zones are exempt from this.
However, Dubai has strict rules about new business setup. Franchising combines the tactical thirst of a small business man with the skill and resources of a bigger company. This kind of structure is very effective and offers you supreme profits in addition to support from the franchiser. In order to open a New Franchise in Dubai; you need to have a business mind with a positive, self-confident and fanatical attitude. Dubai offers an open business atmosphere in its terms of corporate taxation, full repatriation of profit; as well as good infrastructure, entity ownership and human resources.
Steps to Open a New Franchise in Dubai
- Angle your interests and expertise and categorize the service business you wish to enter. Create a list of the existing UAE franchise opportunities by look through local ads and poster; as well as inquire from your neighbors, relatives and friends.
- Create the list of franchisors based on a number of factors such as brand image; consumer preferences as well as quality of service. Slender down the list to a few persons and contact them through call; or mail them your interest in the UAE franchise opportunities.
- Confirm the rules and regulation to open a franchise in Dubai. You need to be a Dubai citizen, and also you need a local sponsor to open a franchise in Dubai; according to UAE law. This law does not apply to a company; if you open company in Dubai free zone; however, you will need a much larger capital base to open a franchise in Dubai free zone. You will need to have good contacts and impact to start and run a franchise in Dubai; and a sponsor will be very useful.
- Sign an agreement with one of the franchisors that suits your desires. Consult a lawyer before you submit the contract to talk over possible bad terms within the contract.
- Write a business plan that contains your business summary; competitor analysis, market development in the specific service, your core competency; also your financial plans, marketing policies as well as your funding alternatives.
- Register your franchise agreement before a UAE court. And apply to obtain the trade license for your business.
- Choose a right location establish on your target market and meet the terms with local zoning rules.
- Open your franchise. Advertise your business from side to side with the help of franchiser.