Licensing a Franchise Outlet in Lebanon: Checks Before Opening

Your existing business may be successful and your brand ready to expand, but that does not mean your outlet’s licences automatically transfer to a franchisee. Before granting a franchise in Lebanon, establish a process that makes each outlet’s opening conditional on the approvals required for its business activities and proposed works. This is more than administrative paperwork: it protects both parties’ investment and trust within the franchise community, and prevents an opening being announced when it cannot legally go ahead.

1. Separate the franchise agreement from permission to operate

Lebanon has no comprehensive franchise-specific law, nor a mandatory franchise disclosure regime comparable to those in some other jurisdictions. The relationship is governed primarily by the Code of Obligations and Contracts and general commercial rules, subject to any mandatory rules applicable to the activity. Building permits, occupancy permits and operating licences remain separate requirements from the agreement between franchisor and franchisee.

Signing the agreement or paying the initial franchise fee therefore does not provide official permission to open to customers. Equally, the franchisor’s approval of the fit-out or equipment does not replace approval from the relevant public authority. Make this distinction explicit in the project documents so that a prospective franchisee does not interpret “the outlet is approved” as confirmation that all licences are in place.

Engage a lawyer and an engineer with relevant expertise to identify the actual requirements. Procedures vary according to the business activity, building and proposed works. The process for a new facility should not simply be applied to existing premises that need only limited alterations.

2. Create a licensing register for each outlet format

Start with the expansion formats you intend to offer: a full-sized outlet, a small sales point, or premises involving preparation or production. Draw up an initial checklist for each format, then tailor it to each outlet. Successfully completing the process for your original outlet does not establish that the next one will be subject to the same conditions.

The licensing guide published by the Investment Development Authority of Lebanon explains that projects involving construction may require building and occupancy permits, as well as operating licences appropriate to the activity. The process may involve the Order of Engineers and Architects, the Directorate General of Urban Planning, the municipality and the relevant ministry. However, the authorities involved and the order in which they must be approached should be determined by the specific outlet’s circumstances.

For each application, include the following in your tracking register:

• The name and purpose of the licence or approval.
• The relevant authority, the applicant and the person responsible for following up.
• The required documents and any that are missing.
• Any procedures that must be completed before the application can be submitted.
• The application status, file reference and a copy of the decision once issued.
• The validity period and renewal conditions, where applicable.

Distinguish estimated dates used for planning and follow-up from confirmed dates. Submitting an application or paying a processing fee does not necessarily mean that a licence has been issued.

3. Link spending to clear approval milestones

Rather than setting a single opening date and trying to complete everything beforehand, divide the project into stages. The team should move from one stage to the next only after checking that the relevant conditions have been met. The aim is not to halt progress, but to avoid buying equipment or carrying out works that would be difficult to change if different official requirements emerge.

You could adopt three internal checkpoints:

• Before carrying out works: Verify that any approvals required for the proposed works are in place and that the plans comply with the relevant conditions.
• Before making final equipment commitments: Review how the authorities’ requirements affect ventilation, building services, space allocation and equipment.
• Before opening to the public: Confirm that the necessary operating licences have been issued and their conditions met, alongside the franchisor’s internal operational approval.

For example, if the outlet concept requires preparation equipment, approval for use within the franchise network is not enough. You must check that it can be installed and operated in accordance with local requirements. Any internal trial run must not become an opening to the public before the required permission is in place.

4. Address licensing delays in the agreement

Do not rely solely on a general clause requiring the franchisee to obtain licences. Specify which documents the franchisor will supply, who will submit the plans, who will pay for any revisions, and how the parties will share updates on the application. Link deadlines to verifiable events rather than phrases such as “soon” or “when ready”.

The agreement should explain how delays affect the opening date, training, equipment delivery and the point at which payments linked to operations become due. Distinguish between delays caused by a missing document that one party is responsible for providing and administrative delays beyond either party’s control.

Also establish a review process if an essential licence cannot be obtained: allow time to address the cause, assess possible changes, then determine what happens to the parties’ obligations and any sums paid in accordance with the agreement and the law. Do not promise a full refund or automatic forfeiture of payments without legal review that takes account of why the licence could not be obtained and what has actually been delivered or completed.

5. Finalise the opening file with records that can be tracked

Before announcing the confirmed opening, gather copies of the licences, approvals, approved plans and operating conditions in a single file. Check that the documents relate to the actual operator, address and business activity, and that any conditions they contain have been addressed. Then sign an internal verification record stating what the franchisor has reviewed, without presenting it as a substitute for official permission.

Keep a schedule of renewals and changes that require consultation with the relevant authorities, such as changes to the business activity or new works. The practical takeaway: do not make opening dependent simply on completing the fit-out. Make it dependent on a documented file that establishes both operational readiness and the necessary legal approvals.