Saudi Arabia

Franchise regulation

Commercial Franchise Law (Cabinet decision No. 122/1441) and the implementing regulations (Ministerial Decision No. 591/1441).

Pre-contractual disclosure requirements

The franchisor is required to provide the prospective franchisee with a disclosure document, at least 14 days before the parties sign a franchise agreement or payment of any monies. The content in the disclosure document must be current, correct and complete. There are 27 areas where information has to be disclosed including information about the franchisor, the network, franchisor’s finances, initial investment costs.

Registration

The franchisor must register the signed franchise agreement and related disclosure document with the relevant authorities within 90 days from the date of signing the franchise agreement. The registration requirement also applies to any amendments to the parties or the term of the franchise agreement.

Other issues

The franchise agreement must be prepared in Arabic or translated into Arabic by a local and certified translator.

Difficulty Rating/Comments

Contact Eddie Chiu - [email protected] or Melissa Murray - [email protected]