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Franchise Sale Agreement for United Arab Emirates

Franchise Sale Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes a franchise relationship between a franchisor and franchisee. The agreement grants the franchisee the right to operate a business using the franchisor's established business system, trademarks, and intellectual property within the UAE market. It covers all essential aspects of the franchise relationship including operational requirements, fees, territory rights, quality control measures, and compliance with UAE federal laws including the Commercial Transactions Law and Commercial Agency Law. The document includes detailed provisions for training, support, marketing, and ongoing operational requirements while ensuring compliance with local regulatory requirements.

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What is a Franchise Sale Agreement?

The Franchise Sale Agreement is a crucial document used when establishing a franchise business relationship in the United Arab Emirates. It serves as the primary contract between a franchisor who wishes to expand their business through franchising and a franchisee who seeks to operate under the franchisor's established business system. The agreement must comply with various UAE federal laws, including the Commercial Transactions Law (Federal Law No. 18 of 1993) and the Commercial Agency Law (Federal Law No. 18 of 1981). This document outlines all essential aspects of the franchise relationship, including grant of rights, territorial exclusivity, fees and payments, operational standards, training requirements, and intellectual property usage. It's particularly important in the UAE context where specific local commercial laws and practices must be considered, including potential requirements for local sponsorship and adherence to UAE commercial regulations.

What sections should be included in a Franchise Sale Agreement?

1. Parties: Identification of franchisor and franchisee with full legal details

2. Background: Context of the agreement, brief description of the franchise system and business

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Grant of Franchise: Scope of franchise rights, territory, and exclusivity terms

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Fees and Payments: Initial franchise fee, ongoing royalties, marketing contributions and payment terms

7. Franchisor Obligations: Support, training, and services to be provided by the franchisor

8. Franchisee Obligations: Operational requirements, compliance with system standards, and reporting obligations

9. Intellectual Property: Use of trademarks, trade secrets, and other IP rights

10. Training and Support: Initial and ongoing training requirements and support services

11. Marketing and Advertising: Marketing obligations, approval processes, and cooperative advertising programs

12. Quality Control: Quality standards, inspection rights, and compliance requirements

13. Records and Reporting: Financial recording requirements, reporting obligations, and audit rights

14. Transfer and Assignment: Rights and restrictions regarding transfer of the franchise

15. Termination: Grounds for termination, procedures, and consequences

16. Post-Termination Obligations: Obligations after agreement ends, including non-compete and confidentiality

17. Governing Law and Dispute Resolution: Choice of law, jurisdiction, and dispute resolution mechanisms

18. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Franchise Sale Agreement?

1. Development Rights: Used when granting rights to develop multiple franchise units or master franchise rights

2. E-commerce Rights: Required when online sales or digital platforms are part of the franchise system

3. Import/Export Rights: Necessary when the franchise involves international trade or cross-border operations

4. Sub-Franchising Rights: Included when the franchisee has the right to grant sub-franchises

5. Equipment Leasing: Required when the franchisor leases equipment to the franchisee

6. Property Requirements: Needed when specific property requirements or lease terms are crucial to the franchise

7. Guarantees: Used when personal or corporate guarantees are required from the franchisee

8. Insurance Requirements: Detailed section when specific insurance coverage is crucial to the operation

What schedules should be included in a Franchise Sale Agreement?

1. Schedule 1 - Business System Manual: Detailed description of the franchise system and operational procedures

2. Schedule 2 - Products and Services: Comprehensive list of approved products and services

3. Schedule 3 - Initial Fee Structure: Breakdown of all initial fees and payment terms

4. Schedule 4 - Ongoing Fees and Charges: Details of royalties, marketing fees, and other ongoing payments

5. Schedule 5 - Territory Map: Detailed description and/or map of the granted territory

6. Schedule 6 - Training Program: Details of initial and ongoing training requirements

7. Schedule 7 - Brand Standards: Specifications for use of trademarks, trade dress, and brand elements

8. Schedule 8 - Equipment and Inventory Requirements: List of required equipment, inventory, and suppliers

9. Schedule 9 - Form of Confidentiality Agreement: Standard confidentiality agreement for employees

10. Schedule 10 - KPIs and Reporting Templates: Performance indicators and standard reporting formats

11. Appendix A - Initial Disclosure Document: Required franchise disclosure information under UAE law

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Franchise Agreement

Cost

Free to use
Relevant legal definitions

















































Clauses








































Relevant Industries

Retail

Food & Beverage

Hospitality

Education

Healthcare

Automotive

Fashion & Apparel

Professional Services

Beauty & Wellness

Real Estate

Technology Services

Entertainment & Leisure

Relevant Teams

Legal

Commercial

Operations

Finance

Business Development

Compliance

Brand Management

International Operations

Strategy

Risk Management

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Commercial Director

Franchise Development Manager

Legal Counsel

Business Development Director

Operations Director

Chief Financial Officer

Franchise Operations Manager

Brand Manager

Compliance Officer

Contract Manager

Regional Director

Managing Director

Business Owner

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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