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FOREIGN COMPANY FRANCHISE

UAE is the most promising and opportunistic international franchise market as it is one of the fastest growing markets in the world today, in one of the most investor-friendly regions.

Franchising allows companies to expand without the risk of debt or the cost of equity. Since franchisees provide the initial investment at the unit level, franchising allows for expansion with minimal capital investment on the part of the franchisor.

In addition, since it’s the franchise, and not the franchisor, who signs the lease and commits to various service contracts, franchising allows for expansion with virtually no possible liability, thus greatly reducing a franchisor’s risk.

For companies with limited resources in terms of staff or time, franchising is often the fastest way to grow. Thus franchising not only allows the franchisor financial leverage, but it allows him to leverage his resources as well.

Once you decide to start a franchising program, there are a few critical research and market analysis details that need to be done. You must identify the potential markets for expanding the business through franchises in terms of the number of players in that market, demand in that market, consumer behavior, business laws and so on.

You will need to have a UAE national sponsor to start and run a franchise in the UAE.  This law does not apply to a business if you open one in any of the multiple free zones of Dubai or Abu Dhabi which allow for 100% foreign ownership and zero taxes. However, you will need a much larger capital base to open in a free zone.