Franchise Agreements in Saudi Arabia_ A 2026 Legal Guide for Foreign Franchisors, Saudi Franchisees, and Master Franchise Partners
                     Franchise Agreements in Saudi Arabia: A 2026 Legal Guide 
for Foreign Franchisors, Saudi Franchisees, and Master 
Franchise Partners
Franchising in Saudi Arabia is governed by the Franchise Law (Royal Decree M/22 of 9 
October 2019) and its Implementing Regulations. The Ministry of Commerce (MoC) 
oversees the framework, and the Saudi Franchise Center an initiative operating 
under the umbrella of Monsha'at (the General Authority for Small and Medium 
Enterprises) is the operational body that administers the mandatory Franchise 
Register on which every franchise agreement covering Saudi territory must be filed. 
Before signing, the franchisor must deliver a compliant Franchise Disclosure 
Document (FDD) to the franchisee at least 14 days in advance, and the franchise's 
trademark must be registered with SAIP, the brand is what the franchisee actually 
licenses. The 2019 Franchise Law replaced the awkward pre-2019 treatment of 
franchises under the Commercial Agencies Law and brought Saudi Arabia into 
alignment with international franchise practice. ABF Law Firm LLP is a Saudi law firm 
based in Riyadh drafting, reviewing, registering, and defending franchise 
agreements for foreign brands entering the Kingdom, Saudi entrepreneurs acquiring 
foreign franchises, and master franchise partners on both sides.
Saudi Arabia in 2026 is one of the world's most active franchise expansion markets. 
Under Vision 2030, F&B, coffee, quick-service restaurants (QSR), retail, wellness, 
fitness, and entertainment franchises have poured into the Kingdom, some directly, 
most through master franchise or area development arrangements with Saudi 
partners. The legal ground under all of this is the 2019 Franchise Law: a modern, 
disclosure-driven regime that fundamentally changed how franchises are structured, 
registered, and enforced in Saudi Arabia.
This guide explains how franchise agreements in Saudi Arabia actually work in 2026 
the legal framework, the mandatory Franchise Disclosure Document, the Franchise 
Register at the Ministry of Commerce, the key terms every Saudi franchise 
agreement should cover, how  foreign franchisors enter the market, and how a law 
firm in Saudi Arabia handles the drafting, registration, and enforcement for 
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● The legal framework Franchise Law M/22, Implementing Regulations, and the 
Ministry of Commerce
● Types of franchise arrangements in Saudi Arabia
● The Franchise Disclosure Document (FDD) and the 14-day rule
● Mandatory registration on the Franchise Register
● Key terms in a Saudi franchise agreement
● Foreign franchisors entering Saudi Arabia, structuring options
● Master franchise vs direct franchise
● Common disputes and how to prevent them
● Timelines and costs
● How to choose a franchise lawyer in Saudi Arabia
● Frequently asked questions
The legal framework Franchise Law M/22, Implementing 
Regulations, and the Ministry of Commerce
Franchising in Saudi Arabia sits within an integrated modern framework:
● The Franchise Law (Royal Decree M/22 of 9 October 2019) - the primary 
statute governing franchise arrangements in the Kingdom. It introduced 
modern disclosure requirements, mandatory registration, standardised 
franchise definitions, and international best-practice provisions on renewal, 
termination, and post-termination obligations. Before 2019, franchises were 
awkwardly regulated under the Commercial Agencies Law, a regime that 
heavily favoured Saudi agents and made termination of foreign brand 
relationships expensive and uncertain. The Franchise Law separated 
franchising into its own regime with international-standard mechanics.
● The Implementing Regulations (2020) - the procedural rules setting the 
mechanics of disclosure, registration, and enforcement.
● The Ministry of Commerce (MoC) - the ministry responsible for framework 
oversight of the Franchise Law.
● Monsha'at (the General Authority for Small and Medium Enterprises) - the Saudi 
authority for SMEs and entrepreneurship, working in cooperation with MoC 
on franchise regulation. Monsha'at is the umbrella authority under which 
franchise operations are administered day-to-day.
● The Saudi Franchise Center - the operational body under Monsha'at's umbrella 
that administers the Franchise Register, reviews Franchise Disclosure 
Documents, and provides franchise-related services to both franchisors 
and franchisees. In practical terms, the Saudi Franchise Center is the entity 
that a foreign franchisor or Saudi franchisee actually deals with on 
registration and disclosure.
● The Franchise Register - the mandatory electronic register administered 
through the Saudi Franchise Center on which every franchise agreement 
covering Saudi territory must be filed within a defined window after 
signing. Failure to register carries real consequences, including limits on 
the franchisor's ability to enforce the agreement.
● The Civil Transactions Law (16 December 2023) - the codification of Saudi civil 
and contract law, which sits behind the Franchise Law and governs general 
contractual matters, formation, performance, and remedies.
● The Commercial Papers Law - governs cheques and promissory notes 
used for franchise fee payments and financial obligations.
● The GCC Trademark Law and the Saudi Authority for Intellectual Property (SAIP) - 
govern the trademark licensing element of the franchise agreement (the 
franchisor's brand marks used by the franchisee).
● The Enforcement Law and Enforcement Court - govern enforcement of 
franchise agreement obligations, including debt recovery for unpaid fees.
The key headline for foreign readers: franchise arrangements in Saudi Arabia are 
now governed by a dedicated, modern, disclosure-based regime, not by the older 
Commercial Agencies Law. Content still describing Saudi franchise law through the 
Commercial Agencies lens is outdated and can materially mislead structuring 
decisions.
Types of franchise arrangements in Saudi Arabia
The Franchise Law recognises several structures, and choosing the right one at 
the outset shapes everything that follows:
● Unit (direct) franchise. A single franchise agreement between the franchisor 
and a franchisee for one location or a defined set of locations. Common for 
domestic brands and for foreign franchisors already operating a Saudi 
subsidiary.
● Master franchise. The franchisor grants a Saudi party, the master franchisee, 
the right to develop and operate the brand across the Kingdom (or a 
defined region), typically with the right to sub-franchise to unit franchisees. 
Common for foreign brands entering Saudi Arabia through a strong local 
partner.
● Area development agreement. The franchisor grants a party the right to open a 
defined number of units within a defined territory over a defined schedule, 
without necessarily granting sub-franchising rights. Common for regional 
expansion.
● Joint venture franchise. Franchisor and Saudi partner establish a joint 
venture entity that operates the franchise. Common for large-scale brand 
rollouts under Vision 2030.
● Development / representation arrangements used for early-stage brand entry 
testing, often as a bridge to a full franchise structure.
For most foreign brands entering Saudi Arabia, the master franchise is the dominant 
structure, it gives the foreign brand a single Saudi counterparty carrying the 
operational and regulatory burden, while the master franchisee builds the network 
locally.
The Franchise Disclosure Document (FDD) and the 
14-day rule
Perhaps the single most important compliance point in the 2019 Franchise Law is 
the  mandatory Franchise Disclosure Document. Before signing any franchise 
agreement covering Saudi territory, the franchisor must deliver an FDD to the 
prospective franchisee at least 14  days before signing. The FDD must contain a 
defined set of information:
● Identity of the franchisor - full legal name, registered address, corporate 
structure, and management.
● Business background - history of the brand, years in operation, and material 
business developments.
● Litigation and enforcement history - any material legal proceedings, 
sanctions, or bankruptcy events.
● Intellectual property - details of the trademarks, service marks, and other IP 
that the franchisee will license, including registration status in Saudi Arabia 
(SAIP filings) and internationally.
● Franchise fees and financial obligations - initial fees, ongoing royalties, 
marketing contributions, renewal fees, and any other payments the 
franchisee must make.
● Territory - the exclusive or non-exclusive area granted, and any 
development obligations.
● Term, renewal, and termination - the initial term, renewal rights, termination 
triggers, and post-termination consequences.
● Franchisee obligations - quality control standards, operating procedures, 
reporting, training, and brand compliance.
● Franchisor obligations - training, support, marketing, supply, and ongoing 
assistance.
● Existing franchisees - a list or summary of the franchisor's current 
franchisees, enabling the prospective franchisee to make reference 
checks.
● Financial statements - the franchisor's audited financials for defined 
periods.
A Saudi franchise agreement signed before the FDD is delivered, or before the 14-
day period has elapsed, is exposed to challenge the franchisee may seek to void it, 
or use non-compliance as leverage in dispute. Preparing a compliant FDD is the first 
significant piece of legal work in any Saudi franchise engagement and, for foreign 
franchisors, requires local counsel to align home-jurisdiction disclosure documents 
with the Saudi requirements.
Mandatory registration on the Franchise Register (Saudi 
Franchise Center under Monsha'at)
The second core compliance obligation is registration. Every franchise agreement 
covering Saudi territory must be filed on the Franchise Register administered by 
the Saudi Franchise Center, the operational body under Monsha'at's umbrella, in 
cooperation with the Ministry of Commerce within a defined period after signing. 
Registration is not a formality:
● Registration is required for enforceability. An unregistered franchise 
agreement exposes the franchisor to real limits on the ability to enforce 
provisions before Saudi courts and the Enforcement Court.
● The Franchise Register is actively reviewed. Not a passive filing, the Saudi 
Franchise Center reviews disclosure compliance and can withhold registration 
where obligations have not been met.
● Amendments require re-filing. Any material amendment to a registered 
franchise agreement must also be filed.
● Renewals require attention. A renewed franchise agreement is treated as 
a new filing.
● Master franchise sub-franchises may need to be tracked in a way that 
meets the regulatory expectation of transparency across the network.
Registration involves preparing the filing package, translating documents where 
required, paying MoC fees, and responding to any regulator queries. Timelines 
are usually a matter of weeks from clean filing to registration, subject to the 
completeness of the submission.
Key terms in a Saudi franchise agreement
Whether you are drafting a franchise agreement as a foreign franchisor, 
reviewing one as a prospective Saudi franchisee, or negotiating a master 
franchise arrangement, the following terms deserve special attention:
● Territory and exclusivity. Is the territory the whole Kingdom, a region, a 
city, or a defined location? Is it exclusive, and if so, on what conditions?
● Term, renewal, and termination. Initial term, renewal rights and conditions, 
termination for cause vs convenience, cure periods, and post-termination 
obligations.
● Initial fees and royalties. The upfront franchise fee, ongoing percentage 
royalty, marketing contribution, technology fees, and any other financial 
obligations expressed in a way that is compliant with Saudi law's treatment 
of interest and financial charges.
● Quality control and brand standards. The operational manual, standards of 
service, product sourcing, supplier requirements, and audit rights.
● Trademark and IP licensing. The scope of trademark licence, quality control 
provisions consistent with the GCC Trademark Law, and the interaction with 
the franchisor's SAIP trademark registrations.
● Training and support. Initial training, ongoing support, marketing 
assistance, and technology transfer.
● Non-compete during and after the term. The extent and enforceability of non-
compete restrictions under Saudi law, particularly post-termination.
● Development obligations. For master franchise and area development 
agreements the schedule of openings and consequences of missed 
milestones.
● Governing law and dispute resolution. Saudi law is often required for the 
operational parts; arbitration (typically Saudi Arabia's Center for Commercial 
Arbitration or an international seat with Saudi enforcement) is common for 
larger cross-border arrangements.
● Termination triggers and consequences. Non-payment, quality failure, 
insolvency, change of control, and what happens to the franchisee's brand 
rights and inventory at termination.
● Post-termination. Return of manuals, de-branding, non-compete, and buy-
back rights.
Trademark registration in Saudi Arabia, the foundation of 
every franchise
A franchise is, at its legal core, a license of the franchisor's trademark plus an 
operating system. Without a properly protected trademark, the franchisor has 
nothing meaningful to license and  the franchisee has nothing meaningful to 
protect. This is why trademark registration in Saudi Arabia is not an add-on to a 
franchise engagement: it is the first legal step, the foundation on which the whole 
franchise structure rests, and the single most important IP asset the franchisor 
brings to the Kingdom.
Trademark registration in Saudi Arabia, the SAIP process, fees, and 
timeline
Trademark registration in Saudi Arabia is administered by the Saudi Authority for 
Intellectual Property (SAIP) under the GCC Trademark Law. Every franchisor 
extending a brand into Saudi Arabia must register the trademark at SAIP before any 
franchise activity filing after the FDD is circulated or after the franchise agreement is 
signed exposes the brand to squatting and materially weakens enforcement. The 
2026 process:
● Filing at SAIP - SAR 1,000 per class, filed electronically on the SAIP portal.
● Substantive examination - 60-day SAIP examination window, followed by 
acceptance, provisional refusal, or rejection.
● Publication in the Trademark Gazette - SAR 500 per class.
● Opposition window - 60 days for third parties to oppose.
● Issuance of the final registration certificate - SAR 5,000 per class after the 
opposition window closes.
● Total government fees - SAR 6,500 per class for a 10-Hijri-year registration 
cycle, renewable indefinitely.
● Typical timeline - 6 to 9 months from filing to registration certificate 
for a clean, unopposed application.
International trademark registration through the Madrid Protocol
Since Saudi Arabia's Madrid Protocol accession on 27 November 2023, international 
franchisors can register a trademark in Saudi Arabia by designating the Kingdom in a 
Madrid application filed through WIPO one application, one set of international fees, 
centralised renewals for multiple countries. SAIP still examines the mark under 
Saudi law, so a local trademark lawyer  in Saudi Arabia is still needed for any 
provisional refusal or opposition.
Trademark class strategy for franchise sectors
Trademark class coverage under the Nice Classification must match the 
franchise scope. Getting the classes right at SAIP filing prevents costly gaps:
● Restaurant franchises - classes 43 (food services), 29 (meat, fish, dairy), 30 
(coffee, tea, pastries, bakery), and often 35 (retail).
● Coffee franchises - classes 30 (coffee, tea), 35 (retail), and 43 (café 
services).
● QSR franchises - classes 43, 29, 30, and 35.
● Retail franchises - classes 25 (apparel) or 35 (retail), plus specific goods 
classes for the format (18 for leather goods, 3 for cosmetics, 20 for 
homeware, and so on).
● Fitness and wellness franchises - classes 41 (fitness services), 44 (wellness), 
and 25 (activewear).
● Automotive service franchises - classes 37 (services), 4 (fuels/lubricants), 12 
(parts).
● Education franchises - classes 41 (education services) and 16 (printed 
materials).
The trademark license clause in the franchise agreement
The trademark license clause is the heart of every franchise agreement, it 
defines what the franchisee is actually licensed to use, and how. Key drafting 
points:
● Scope of the licensed marks - word marks, logos, combined marks, and 
trade dress.
● Quality control obligations - mandatory under the GCC Trademark Law to 
preserve the license's validity; without quality control, the license is at risk.
● Sub-licensing rights - critical in master franchise and area development 
structures.
● Consequences of misuse - remedies for unauthorized, non-
compliant, or brand-damaging use.
● Territory of the trademark license - should align with the franchise 
territory.
Franchise Disclosure Document: trademark disclosure 
requirements
The FDD must include truthful, current information on the franchisor's trademark 
portfolio in Saudi Arabia SAIP registration status, class coverage, pending 
oppositions, licenses already granted to other parties, and any material IP 
litigation. A defective IP disclosure in the FDD is one of the most common 
vulnerability points in Saudi franchise engagements.
Trademark renewal: tracking against the franchise term
Trademark renewal in Saudi Arabia is required every 10 Hijri years, indefinitely 
renewable. Franchise agreements running longer than the initial trademark 
registration must include the franchisor's obligation to maintain the mark; a lapsed 
trademark mid-franchise is a serious  failure that voids the franchisee's license. 
Renewal fees track filing fees, and grace periods carry surcharges.
Trademark enforcement: infringement, opposition, and counterfeits
The franchisor (and, where empowered, the master franchisee) must enforce 
the trademark against unauthorized use, infringement, and counterfeits through:
● Cease-and-desist letters - often the fastest and most cost-effective first 
step.
● SAIP administrative complaints - particularly effective for counterfeit 
goods and customs seizures.
● Trademark opposition - filing an opposition within the 60-day publication 
window against a conflicting mark.
● Commercial Court proceedings - for infringement damages and injunctive 
relief.
● Enforcement Court - to enforce Commercial Court judgments through 
Najiz.
How ABF handles franchise trademark protection
ABF Law Firm LLP is both a licensed Saudi law firm and a SAIP-registered trademark 
agent, a dual capacity that is rare in the market and lets us handle the full 
trademark lifecycle for franchisors under one roof. Our trademark lawyer in Saudi 
Arabia team handles trademark search and clearance, SAIP filings (single class or 
multi-class portfolios), Madrid Protocol designations, franchise-specific class 
strategy, license clause drafting into the franchise agreement, FDD IP disclosure, 
renewal management, opposition and cancellation proceedings, and enforcement 
against counterfeits and unauthorized use before the Commercial Courts and 
Enforcement Court.
For any foreign franchisor entering Saudi Arabia, the first legal step is not the 
franchise agreement, it is the trademark filing. Every subsequent step in the 
franchise engagement depends on it.
Foreign franchisors entering Saudi Arabia: master 
franchise or company formation
Foreign brands typically enter Saudi Arabia through one of two primary routes: (1) 
master franchise granting a Saudi partner the right to develop the brand; or (2) 
company formation in Saudi Arabia establishing a foreign-owned Saudi subsidiary 
licensed by MISA that operates as the franchisor directly. The choice shapes 
everything that follows: capital deployment, control, timeline, and long-term brand 
equity. The Saudi franchise market has become a headline destination under Vision 
2030 driven by consumer spend, tourism, entertainment openings, the Regional 
Headquarters (RHQ) programme, and 100% foreign ownership across a widening list 
of sectors.
Route 1 - Master franchise with a Saudi partner
● The model. Grant a Saudi party the rights to develop the brand across the 
Kingdom (or a region), typically with the right to sub-franchise to unit 
franchisees.
● Advantages. Speed to market, low capital deployment for the foreign 
brand, single Saudi counterparty carrying operational and regulatory 
burden.
● Trade-offs. Less brand control, heavy dependence on the Saudi partner's 
execution, complex sub-franchise arrangements.
● When to choose. Foreign brands seeking rapid market entry without direct 
operational presence in the Kingdom.
Route 2 - Company formation in Saudi Arabia (MISA-licensed subsidiary)
Setting up a foreign-owned Saudi subsidiary is the alternative and increasingly the 
preferred route for foreign brands committed to long-term direct presence. It gives 
the brand maximum control, protects long-term equity value, and enables the 
Saudi entity to serve as the franchisor for its own network of unit franchisees. 
Company formation in Saudi Arabia (also called business setup in Saudi Arabia) 
involves:
● Entity choice. Limited liability company (LLC), joint stock company (JSC), 
branch of a foreign company, or Regional Headquarters (RHQ) each with 
distinct capital, governance, and tax implications.
● MISA foreign investment license. The Ministry of Investment (MISA) issues the 
foreign investment license permitting the foreign shareholder to hold 
Saudi equity. 100% foreign ownership is available in most commercial 
sectors under Vision 2030 reforms.
● Commercial registration. Registration with the Ministry of Commerce through 
the Saudi Business Center, issuing the commercial registration (CR) that 
legally activates the  entity.
● Tax and payroll registration. ZATCA (Zakat, Tax and Customs Authority) for 
VAT, corporate income tax, and Zakat where applicable, and GOSI (General 
Organization for Social Insurance) for employee social insurance.
● Regional Headquarters (RHQ) programme. Multinationals that establish their 
regional HQ in Riyadh receive material MISA incentives; since 2024, Saudi 
government contracting has favoured entities with a Saudi RHQ. An RHQ can 
also serve as the corporate hub for the group's Saudi franchise network.
● End-to-end setup. Our foreign investment lawyer in Saudi Arabia team handles 
the full company setup in Saudi Arabia for foreign franchisors MISA licensing, 
MoC commercial registration, ZATCA and GOSI registration, banking, and 
operational readiness typically over 4 to 8 weeks depending on sector and 
structure.
Route 3 — Joint venture
● The model. Foreign brand and Saudi partner establish a joint venture entity 
combining local partner expertise with foreign brand control.
● When to choose. Large-scale Vision 2030 rollouts, sectors requiring a Saudi 
partner, or where the foreign brand and Saudi partner want deep alignment 
of interest and shared upside.
Shared workstreams across all routes
● Trademark protection. Register the brand at SAIP before any franchise or 
market activity. Since Saudi Arabia's Madrid Protocol accession on 27 
November 2023,
international applicants can designate the Kingdom through WIPO in a 
Madrid Protocol application.
● FDD and franchise agreement drafting. Adapt the home-jurisdiction FDD (US, 
UK, or otherwise) to Saudi law requirements, in bilingual Arabic-English form. 
The FDD sits alongside the franchise agreement, side letters, guarantees, 
and supply arrangements that our commercial contract lawyer in Saudi Arabia 
team drafts in parallel.
● Employment and Saudization. Franchise operations employing Saudi staff 
must comply with Nitaqat and MHRSD wage protection rules. Our 
employment lawyer in Saudi Arabia team handles Saudization compliance 
across franchise networks.
● Real estate. Location leasing (Ejar-registered), fit-out, and for foreign 
investor subsidiaries, the Foreign Real Estate Ownership Law (M/14, 
14 July 2025) considerations.
● Choice of Saudi partner. For master franchise and joint venture routes, the 
Saudi partner's operational strength, capital, and reputation are the single 
biggest determinants of network success.
How to choose between routes
Master franchise works best when the foreign brand wants speed to market, low 
capital deployment, and a single Saudi counterparty. Company formation in Saudi 
Arabia (MISA subsidiary) works best when the foreign brand wants direct control of 
the network, protects long-term brand equity, has the capital and management 
bandwidth to operate in the Kingdom directly, or intends to make Saudi Arabia a 
regional hub via the RHQ programme. Many groups combine to establish a Saudi 
subsidiary as the corporate hub, then grant unit franchises or area development 
rights from that subsidiary to sub-operators.
The Saudi franchise growth sectors under Vision 2030
Saudi Arabia's franchise market is broad, but a handful of sectors account for the 
lion's share of activity in 2026 and each has its own legal and commercial nuances:
● F&B franchises and restaurant franchises. The largest single franchise 
segment in Saudi Arabia. International brands entering via master 
franchise, and Saudi entrepreneurs building multi-brand portfolios, 
dominate the deal flow. Trademark protection, quality control in the FDD, 
and Ejar-registered leases are central.
● Coffee franchises. Saudi coffee consumption has grown into one of the world's 
most vibrant specialty-coffee markets. Both international coffee brands and 
homegrown Saudi coffee concepts are actively franchising domestically and 
regionally.
● Quick-service restaurant (QSR) franchises. Global QSR brands continue 
expanding through master franchise structures. Key considerations include 
supply chain, area development schedules, and territorial exclusivity.
● Retail franchises. Fashion, homeware, cosmetics, and specialty retail often 
through master franchise with a Saudi partner running physical stores and 
e-commerce fulfillment.
● Fitness and wellness franchises. A fast-growing category, driven by Vision 
2030 lifestyle initiatives and the opening of Saudi women's sports and 
fitness sectors.
● Entertainment and family-entertainment franchises. Cinema, gaming, 
indoor entertainment, and family concepts, sectors newly opened 
under Vision 2030.
● Education and edtech franchises. Early-childhood education, tutoring, 
and skill-development franchises are an emerging category.
● Automotive service franchises. Servicing, detailing, and after-market parts 
franchises expanding under Saudi consumer growth.
The Franchise Law (M/22) applies uniformly across sectors, but the operational 
agreement quality standards, supply, marketing contribution, territory is calibrated 
to the sector. A  restaurant master franchise reads very differently from a fitness 
franchise, and both differ from a retail franchise.
Master franchise vs direct franchise: how to choose
The single most consequential structuring decision for foreign brand entry is master 
franchise vs direct:
● Master franchise pros: single Saudi counterparty carrying operational and 
regulatory burden; local expertise and networks; faster rollout; simpler 
ongoing management from the franchisor's side.
● Master franchise cons: less brand control; dependence on one Saudi 
partner's execution; complex sub-franchise arrangements; higher stakes in 
choosing the master franchisee well.
● Direct franchise pros: maximum brand control; direct relationship with 
each unit franchisee; ability to set uniform standards.
● Direct franchise cons: the franchisor bears operational and regulatory 
burden across every unit; slower rollout; higher ongoing management cost.
For most foreign brands, master franchise is the dominant model but the choice 
depends on the brand's international footprint, the availability of a strong Saudi 
partner, and the appetite for direct market presence.
Common franchise disputes and how to prevent them
The most common franchise disputes in Saudi Arabia fall into predictable 
categories:
● Unpaid royalties and fees. Prevented by well-drafted payment terms, cheques 
or Nafith notes as executive instruments, and clear default triggers. Our 
commercial litigation lawyer in Saudi Arabia team handles franchise fee 
enforcement through the Enforcement Court and Najiz.
● Quality and brand-standard breaches. Prevented by explicit standards 
in the operational manual, audit rights, cure periods, and staged 
termination triggers.
● Territory encroachment. Prevented by precise territory definitions and clear 
rules on online sales, delivery zones, and adjacent territories.
● Termination and post-termination disputes. Prevented by clear termination 
triggers, cure periods, and post-termination obligations set out in advance.
● Non-compete enforceability. Prevented by drafting non-competes that are 
reasonable in scope and duration, and by taking a Saudi law view rather 
than importing
home-jurisdiction assumptions.
● Sub-franchise conflicts (in master franchise structures). Prevented by clear 
rules on sub-franchise standards, approvals, and reporting.
Timelines and costs in 2026
FDD preparation. Typically 2 to 4 weeks for adaptation of a home-jurisdiction FDD to 
Saudi law requirements. Bilingual delivery adds some time.
Franchise agreement drafting or review. A well-drafted unit franchise agreement is 
usually a 1 to 2 week engagement. A master franchise or area development 
agreement, with
cross-border considerations, is typically 3 to 6 weeks.
Franchise Register filing. Weeks from clean submission to registration, subject to 
MoC review and any queries.
Legal fees. Fee arrangements typically include fixed fees for FDD preparation and 
franchise agreement drafting, hourly rates for negotiation and litigation, and for 
larger master franchise arrangements capped-fee arrangements. Insist on a written 
engagement letter with clear scope and fees before work begins.
How to choose a franchise lawyer in Saudi Arabia
Six practical filters for choosing a strong franchise lawyer in Riyadh or across Saudi 
Arabia:
● Direct Franchise Law M/22 experience. Ask specifically about drafting and 
reviewing agreements under the 2019 Franchise Law, not general 
commercial contracts experience.
● FDD drafting capability. Preparing a compliant FDD, particularly when adapted 
from a US or UK FDD, requires specific expertise. Ask for examples.
● MoC registration experience. The Franchise Register is where compliance 
meets bureaucracy; experienced counsel avoids delays.
● Bilingual capability. Franchise arrangements are usually bilingual Arabic-
English; parity in both languages matters.
● Cross-practice depth. Franchise work overlaps with trademark (SAIP), 
commercial contracts, corporate (for master franchise entities), employment 
(for Saudization), real estate (for leasing), and debt recovery (for unpaid 
fees). A full-service firm handles all of it under one roof.
● Fee transparency. Insist on a written fee arrangement before work begins.
How a law firm in Riyadh helps with franchise 
agreements
ABF Law Firm LLP advises foreign franchisors entering Saudi Arabia, Saudi 
entrepreneurs acquiring foreign franchises, master franchise partners on both sides, 
and unit franchisees across the full franchise lifecycle of drafting and adapting 
Franchise Disclosure Documents to Saudi law, drafting and negotiating unit, master, 
and area development franchise agreements in bilingual Arabic-English form, 
registering agreements on the Franchise Register at the Ministry of Commerce, 
coordinating SAIP trademark protection, structuring the corporate vehicle for foreign 
franchisor entry, and handling franchise disputes and enforcement before the 
Commercial Courts and Enforcement Court. As a law firm in Riyadh, Saudi Arabia, we 
handle franchise matters end-to-end for both sides of the table. To discuss your 
franchise, contact our team or explore our franchise agreement lawyer in Saudi Arabia 
sKeervyic et.akeaways
● Franchise agreements in Saudi Arabia are governed by the Franchise Law 
(Royal Decree M/22 of 9 October 2019) and its Implementing Regulations, 
administered by the Ministry of Commerce, not the Commercial Agencies 
Law.
● A compliant Franchise Disclosure Document must be delivered to the 
prospective franchisee at least 14 days before signing, with defined 
mandatory contents.
● Every franchise agreement covering Saudi territory must be filed on the 
Franchise Register at the Ministry of Commerce; unregistered 
agreements face enforcement limitations.
● Foreign franchisors typically enter Saudi Arabia through master franchise 
arrangements with a Saudi partner but direct franchise and joint venture 
structures are also available.
● Franchise work overlaps with trademark protection (SAIP), corporate 
formation (MISA), employment (Saudization), real estate leasing (Ejar), and 
debt recovery (Enforcement Court and Nafith notes).
● A well-drafted franchise agreement, properly disclosed and registered, 
prevents the most common disputes, unpaid royalties, quality breaches, 
territory encroachment, and termination fights.
Speak to a franchise lawyer in Riyadh
Whether you are a foreign brand evaluating Saudi entry, a Saudi entrepreneur 
negotiating a master franchise, a franchisee reviewing terms, or a franchisor 
dealing with a Saudi franchise dispute, ABF Law Firm LLP can help. As a law firm 
in Riyadh, Saudi Arabia, we handle franchise matters end-to-end with bilingual 
capability, transparent fees, and the practice-area
breadth to cover trademark, corporate, employment, real estate, and disputes 
under one roof.
Contact us for an initial consultation, or read more on our insights blog.
About the author: Ali Alamri is a Partner at ABF Law Firm LLP, a law firm in Riyadh, Saudi 
Arabia. Licensed by the Saudi Ministry of Justice, he advises foreign franchisors, Saudi 
franchisees, and master franchise partners on franchise agreement drafting, Franchise 
Disclosure Documents, Ministry of Commerce registration, trademark protection, and franchise 
dispute resolution under the Franchise Law and Saudi commercial law.
Disclaimer: This article is for general information only and does not constitute legal advice. 
Franchise Law procedures, Implementing Regulations, and MoC practice change; obtain advice 
specific to your matter before acting. Last updated: July 2026.
Frequently asked questions about franchise agreements 
in Saudi Arabia
What law governs franchise agreements in Saudi Arabia?
The Franchise Law (Royal Decree M/22 of 9 October 2019) and its Implementing 
Regulations, administered by the Ministry of Commerce. The Civil Transactions Law 
(December 2023) sits behind the Franchise Law for general contract principles. 
Franchise arrangements are no longer regulated under the Commercial Agencies 
Law, this changed in 2019.
What is a Franchise Disclosure Document (FDD) and when must it be 
delivered?
An FDD is a mandatory pre-signing disclosure document containing defined 
information about the franchisor, the brand, the franchise, and the financial 
arrangements. Under the Franchise Law, the franchisor must deliver the FDD to 
the prospective franchisee at least 14 days before the franchise agreement is 
signed. Non-compliance exposes the agreement to challenge.
Do I need to register my franchise agreement in Saudi Arabia?
Yes. Every franchise agreement covering Saudi territory must be filed on the 
Franchise Register administered by the Saudi Franchise Center (under Monsha'at's 
umbrella) in cooperation with the Ministry of Commerce within a defined period 
after signing. Registration is not a formality: an unregistered agreement is exposed 
to real enforcement limitations before Saudi courts.
Can a foreign franchisor enter Saudi Arabia without a Saudi entity?
Yes through a master franchise, area development agreement, or unit franchise 
with a Saudi party. Alternatively, the foreign franchisor can establish a MISA-
licensed Saudi subsidiary and franchise directly. Master franchise is the dominant 
structure for foreign brand entry.
What is a master franchise?
A structure where the foreign franchisor grants a Saudi party (the master 
franchisee) the right to develop and operate the brand across the Kingdom (or a 
region), typically with the right to
sub-franchise to unit franchisees. The master franchisee carries the operational 
and regulatory burden; the foreign franchisor deals with a single Saudi 
counterparty.
How long does it take to launch a franchise in Saudi Arabia?
From FDD preparation through franchise agreement drafting, MoC registration, 
trademark protection, corporate setup (if applicable), and operational readiness, 
typical timelines are 2 to 4 months for well-prepared foreign franchisors and Saudi 
master franchisees. Complex master franchise structures with cross-border 
considerations can take longer.
How much does a franchise lawyer cost in Saudi Arabia?
Fee arrangements vary. FDD preparation is typically a fixed fee. Unit franchise 
agreements are usually a fixed or capped fee. Master franchise and area 
development agreements, with
cross-border and negotiation complexity, are typically capped-fee or hourly. Insist 
on a written engagement letter with clear scope and fees before work begins.
What happens if a franchisee stops paying royalties?
The franchisor's remedies depend on how the agreement was structured. Well-
drafted franchise agreements provide for Nafith electronic promissory notes, 
cheques as executive instruments, and clear default triggers enabling rapid 
enforcement at the Enforcement Court through Najiz without a prior civil suit. Poorly 
documented royalty structures require Commercial Court action first.
Can a Saudi franchise agreement be governed by foreign law?
Parties can agree to a foreign governing law for the substantive commercial 
terms, but Saudi mandatory rules (particularly the disclosure, registration, and 
enforcement provisions of the Franchise Law) apply regardless. Dispute resolution 
can be by Saudi courts, Saudi arbitration (SCCA), or international arbitration with 
Saudi enforcement.