Franchising, a new win/win formula for expats in the Middle East

Sep 14, 2023

For decades, franchises have been an economic model to which thousands of entrepreneurs aspire. It's no coincidence that icons such as McDonald's and Starbucks have taken this model to a global level, turning every street corner into a business opportunity. What began as a simple economic idea has now evolved into a veritable business revolution.

In the Middle East, the franchise craze has not only continued, it has intensified! The region embraces this trend with renewed fervor, proof of its relevance and undeniable potential.

Last year, the franchise economy reached a value of around $30 billion, with annual growth of 27%. This makes it the fastest-growing non-oil market in the Middle East.

It's no surprise that Dubai is an ideal business destination, with its business-friendly environment, absence of taxes and increased opportunities. Add to this a business model that has already proved its worth, and there's plenty to like. 

A country that is home to over 200 nationalities is open to welcoming the best-known brands from across Europe, Asia, the Americas and Africa.

Why to open  a franchise in the Middle East?

A strategic investment center, the Middle East has become a place that attracts more and more entrepreneurs every year. With a population that exceeds 4 million inhabitants, Dubai is constantly seeing its population increase. Jewelry brands, clothing, watches, restaurants, beauty salons from all over the world, have great success with this multicultural population ready to discover and embrace change. 

  • Booming market: the Middle East is experiencing impressive economic evolution, with growing demand in various sectors such as real estate, hospitality, catering, fashion and technology. Franchising in this region means accessing a dynamic market, driven by a young, urban and growing population. 

  • High purchasing power: the countries of the Middle East are characterized by their high level of wealth. The growing middle class, combined with a consumer culture, creates an environment conducive to franchises offering quality products or services. Middle Eastern consumers are open to the brand experience and are willing to spend on internationally renowned products and services. 

  • Investor-friendly legislation: governments have put in place policies that favor foreign investment; simplified settlement processes, reduced taxes, plans to allocate funds for specific projects, openness to new technologies, cryptocurrencies, etc. 

  • Strategic location: the Middle East enjoys a privileged geographical position between Asia, Europe and Africa, making it a strategic transit point for global trade. 

  • Modern infrastructure: the Middle East has a modern, high-quality infrastructure, including international airports, world-class shopping centers, upscale hotels and advanced logistics facilities. This solid infrastructure facilitates the development and management of a franchise, providing opportunities for rapid expansion and an improved customer experience. 

Thus, the Middle East, which has been booming since the 1960s, wants to attract young talents and motivated entrepreneurs. For their part, young entrepreneurs who want to start a profitable business and who encounter difficulties in their country where there is increased competition and a saturated system, have the interest to start on a virgin land, in full economic expansion. And why not start with a brand that has already proven itself? It’s a win-win formula for expats in the Middle East.

How to open a franchise in the Middle East ?

Before any business launch and especially for the launch of a franchise, it is necessary to be careful and analyze the market. It is necessary to seize opportunities, analyze the legislation, find a good co-contractor, write a contract, make a business plan, etc. 

A professional guidance will be essential in this adventure to be safe from all the risks because, an ounce of prevention is worth a pound of cure.  

Here are a few things you should consider when deciding to open a franchise in the Middle East: 

  • Understanding the types of franchises available in Dubai: there are two types of franchises recognized by the Dubai Commercial Register:
  • Single unit franchises: as a franchisee, you sell the franchisor’s products and services through a single company.

  • Multi-unit/ developed franchises: the franchisee is allowed to open several units operated by a single company.
  • Opening a company that fits your business model: in Dubai, opening companies with specific activities requires obtaining the appropriate licenses. When an individual does not obtain the right license he may incur financial risks in the form of fines, but also be constrained to form another company or obtain new licenses, incurring financial losses. That is why special attention must be paid to this crucial step. 

  • Write the right contracts: each business requires the conclusion of several contracts that formalize the commercial relations between the parties. Franchisors must be very careful because when setting up a franchise, the contract can be the guarantee of their success. Pre-contractual documents, operating manual, exclusivity clauses, procurement clauses, non-competition clauses, etc. A single element that is not taken into account can jeopardize the success of your business. This is why an accompaniment by a lawyer is essential to ensure that the contract is balanced and that it guarantees you all the rights toward your co-contractor, but also to defend you in case of litigation. 

Opening a franchise in the Middle East can be a golden opportunity for your career. Do not hesitate to contact us to accompany you in all the stages of this adventure, from the analysis of the market to the signing of all the necessary contracts. 

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