Dubai is a business hub that attracts worldwide business owners to launch a franchise business there. Franchises of all shapes and sizes are active all over the UAE, enabling owners to raise their profits and returns on each investment.
The business climate is inspiring in several ways. Some of the famous franchises are restaurants, dry cleaning, meal delivery, etc. If you want to launch a franchise in the UAE, there are many legal and regulatory problems you must know.
Any investor who wants to open a franchise in Dubai must get a franchise license. Handling a successful franchise needs commitment, expertise, and a flourishing economy. If you want to buy or start a franchise, you must continue reading this article.
What is Franchise?
A franchise is a business strategy where the franchisor allows individuals to sell its products or services to clients. For utilizing the franchisor’s brand name, identity, operational approach, and trademarks, the franchisees is supposed to pay a royalty.
A franchisor allows people to sell their products or goods. Moreover, they should be confined and follow the rules or regulations of the country.
How to establish a franchise business in Dubai?
In Dubai, you can see many franchise business options. The franchise industry is more than $30 billion, and this digit is increasing. American franchisers or brands have the biggest share in the Middle East market.
Franchise Dubai provides various business opportunities for attracting businessmen. American brands govern the market with a share of approximately 70%.
The UK, Germany, Italy, China, and Japan all have popular brands. Many extra franchisees and franchisors keep asking for novel franchise brands.
There are more than 100 various kinds of franchise businesses you can select from. These encompass both cost-effective and substantial investments. The choice depends on your interest, capital, and skills.
Conduct Your Due Diligence Thoroughly
Dubai significant market size presents difficulties in performing due diligence and comprehensively understand the market.
Initially, Dubai had limited foreign ownership of enterprises, including franchises, which were solely under the control of local residents and organizations.
However, Dubai allows international investors to own and manage their enterprises without requiring Emirati sponsors or partners to attract extra foreign capital.
It means you can view the most profitable franchise and select the one that matches your expertise and knowledge.
Dubai has two different types of franchise businesses: single-unit franchises and multi-unit or developed franchises.
Single-unit franchises enable you to sell products or services through a single organization, whereas multi-unit or developed franchises enable you to open many other units and operate them in a single organization.
It is important to know the kind of Dubai franchise business you have to establish or purchase. After identifying the industry you are interested in, you have to search for a few testimonials and reviews.
If possible, ask the organization about their Franchise Disclosure Document and learn more about the organization.
This document is crucial because it consists of sensitive information about the organization. It should be available for every franchisor.
In short, the franchise business Dubai provides ample business opportunities. You can also engage with the right business consultant and learn more about franchising in Dubai.
Make a Business Plan
When purchasing or launching a franchise business, you need to develop a business plan. The plan should consist of a summary of the organization, including business activities, competitor analysis, target market, etc.
Moreover, it is good to have business activities, competitor analysis, target market or any kind of funding substitute. To secure your investment, you must know about the risk associated with your business and have a plan to manage risk.
Obtain a correct trade or business license
It is feasible to establish a franchise or seeking a Dubai franchise for sale and purchase in freezones and Mailand. The type of business license you secure depends on several factors.
Conducting business in Mailand is entirely different from free zones. Also, the nature of business activity and the number of shareholders or visas will identify the type of trade license you will obtain.
For instance, you select to begin a business on the mainland, requiring a local sponsor. But in the free zone, you don’t require any local sponsor to operate a business. Business owners in the free zone have 100% ownership.
The license application process depends on the setup you select: free zone or mainland. You must have a trade license to open a franchise in Dubai or any other city in the UAE.
The best approach to an accurate trade license is to work with professionals. In this way, you will get recommendations on how to begin a business in Dubai, and they will handle the application procedure on your behalf.
Obtain accurate support services and protect the visa and license you require to begin your franchise business.
Read out: ALL You Need to Know About Trade License UAE
Seeking a Visa
You will require a Visa to work or start a business in Dubai. One of the benefits of possessing a visa is that you can sponsor your family or domestic worker.
In accordance with Dubai laws and regulations, you have the right to sponsor a visa to foreign people.
However, the franchise business size, setup, profit, and proof of accommodation will identify the number of families that you can sponsor. To apply for a visa, you have to take a compulsory medical exam.
Franchise agreement for franchise business
Along with the license, you must possess a powerful franchising agreement. This agreement serves as a crucial legal contract between the franchisor and the franchisee. This contract has all the details, rules and regulations.
It would be great to involve a lawyer when designing the franchise agreement. Both parties need to present this agreement in front of the Court of Dubai before agreeing and signing.
Establishing a Corporate Bank Account
You must possess a corporate bank account to conduct business in Dubai. Knowing the different financial institutions present in Dubai is the best idea before selecting one.
This will assist you in choosing the bank that is suitable for your business. Similarly, beginning a franchise business adheres to this principle.
Why you should establish a Franchise in UAE
Foreign as well as local investors are allowed to go into business by the UAE. A number of multinational companies are interested in this region’s prosperous economy.
Moreover, franchisors and franchisees are being encouraged to invest, and the government has allowed investors to exploit its several Emirates cities.
There are many reasons for starting a franchise in Dubai.
Spending on Joint Ad, Marketing, and Business Launch
One of the major reasons is that you do not have to worry about designing a logo, pricing strategies, writing sales copy or understanding customer buying behavior.
Probably already your franchise holds a unique market position; therefore, your efforts will simply extend brand’s proximity to customers. This partly helps in business planning and risk assessment processes.
With a well-known brand you will require less money on advertising and marketing. This means you will save more money that can be reinvested into the company.
Booming Economy
The strong UAE economy is due to its rich natural resources, like oil and natural gas that are availed to many countries. Furthermore, the UAE has one of the highest GDPs per capita and average monthly wages.
Additionally, tourism is a major contributor of the UAE’s economy. In this regard, it can be noted that any thriving economy provides fertile ground for investment and therefore business success is inevitable.
Prime Target Market
Most areas in UAE are urban. Urban areas are home to more than 80% of the country’s population. Major cities include Sharjah Al-Ain, Dubai, Abu Dhabi and Ajman. However, you will have greater opportunities for networking if your business sets up in one of Dubai’s free zones.
Assume that you choose Dubai as the place to start your business. Opening a franchise in such a location can greatly add value because it helps you access about 2.9 million people in your market.
Furthermore, since Dubai is considered a global premier shopping destination; it shall expose your company too many potential buyers. You must also ensure that once your UAE franchise business becomes operational you have an effective marketing strategy catered towards such a large audience.
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Zero Taxes
The features of free trade areas in Dubai enable favorable conditions for franchise opportunities. Additionally, these zones provide full ownership and exemption from any taxes. Setting up a firm within one of the UAE Free Zones would consequently translate into extra savings.
However, your brand and location may differentiate you even as you continue to face competition. Remember that if the franchise is from a well-known brand, you will have to meet the needs of your customers.
However, your brand and location may differentiate you even as you continue to face competition. Bear in mind that you will be obliged to meet the demands of your consumers in case your franchise comes from a famous brand.
Customers have prior knowledge of what is expected hence the brand must keep its reputation intact. Consequently, familiarize yourself with the franchisor’s organizational values like culture and commitment to excellence so as to sustain business operations.
Choosing the Right UAE Franchise
You need a lot of research and good investment skills in order to open the most profitable franchise in UAE. You should also consider working together with an experienced business consultant regardless which kind of franchise opportunity you choose.
Nam Corporate will help establish your company ensuring everything goes right as planned. We have been setting up companies in UAE for many years and we know all necessary laws and procedures very well.
Please call us today to talk about franchising in United Arab Emirates with one of our specialists.
