Buying a Franchise in the UAE: Checking Trade Mark Ownership and Licensing Authority

You may be negotiating with a persuasive representative of a well-known brand, but its reputation does not prove that the company in front of you has the right to grant a franchise in the UAE. A sound franchise decision starts with checking the chain of rights: who owns the trade mark, who licenses its use, and does that party’s authority extend to granting you the rights on offer? These checks protect your investment against a dispute that could force you to stop using the name after you have fitted out the premises.

1. Understand the difference between trade mark registration and commercial agency registration

The UAE has no standalone franchise law, no mandatory franchise-specific pre-contract disclosure document, and no separate compulsory register of franchise agreements. Do not therefore assume that the franchise sales pack has been reviewed by an official body, or that the absence of a disclosure document alone breaches a franchise-specific law.

The relationship is governed by general civil and commercial rules, including Federal Decree-Law No. 50 of 2022 issuing the Commercial Transactions Law. Trade marks are governed by Federal Decree-Law No. 36 of 2021 on Trade Marks. Federal Law No. 3 of 2022 on the Regulation of Commercial Agencies may also apply where the arrangement meets its requirements and is registered as a commercial agency.

These are distinct registrations: trade mark registration concerns protection of the mark, commercial agency registration concerns the legal framework governing the commercial relationship, and a trade licence confirms permission to carry out specified activities. Holding one of these documents does not remove the need for the others where applicable. Ask a local lawyer to identify the legal framework that applies to your agreement, rather than relying on a description such as ‘approved franchise’.

2. Check the trade marks you will actually use

Start with a precise list of the brand assets customers will see: the name, logo, Arabic version and any key sub-brands. The registration certificate you are shown may cover a different name from the one you intend to put above your premises, or an old logo that no longer matches the current branding.

Ask the franchisor, or its authorised representative, for the following documents:

• The UAE trade mark registration certificate, or evidence of protection under an international registration extending to the UAE.
• Details of the owner, registration number, classes, and goods or services covered.
• Evidence of the registration’s current status, renewal and any transfer of ownership.
• A statement of any outstanding oppositions or disputes that could affect your use of the mark.

Commission a specialist to check the official register rather than relying solely on a copy of a certificate. Registration in the brand’s home country does not, by itself, establish protection in the UAE. Nor is reserving a trade name or domain name equivalent to registering a trade mark.

Compare the scope of protection with your proposed activities. A mark registered for particular products does not automatically cover every service your business will provide. If the registration is still an application under examination, treat it as an application, not a final registered right, and request a written explanation of the risks and alternatives.

3. Trace the franchisor’s authority back to the trade mark owner

The party selling you the franchise may be the trade mark owner, a subsidiary or a master franchisee. Similar names within a corporate group do not establish that rights have passed between its companies. The crucial question is: which document authorises this particular company to grant you the right to use the mark and operate a sub-franchise in the UAE?

If the franchisor is an intermediary in the chain of rights, ask to see the relevant sections of its underlying agreement, with unnecessary commercial information redacted where appropriate. Check whether sub-franchising is permitted, the limits on authorised activities, any requirement for the owner’s consent, and the term of the authorisation.

Compare the term of your agreement with the duration of the franchisor’s rights. If the proposed term extends beyond its confirmed authorisation, do not treat the possibility of renewal as a guarantee. Request a written solution for your lawyer to review, such as direct consent from the owner or a clear arrangement allowing the licence to continue if the relationship between the owner and the franchisor changes.

Also check that the person signing your agreement has authority to do so. If the other party refuses to disclose its underlying agreement, discuss alternatives such as direct confirmation from the owner or certified extracts. A general marketing letter, however, is no substitute for evidence of authority.

4. Turn your findings into contractual rights

Do not leave the results of your checks solely in separate correspondence. Attach a schedule to the agreement identifying the licensed trade marks, their owner, registration numbers and permitted uses. Ideally, this should cover use of the name on signage, digital accounts, apps and local advertising, subject to the agreed brand guidelines.

Negotiate express representations that the franchisor has the necessary authority to grant the rights and has disclosed material disputes and restrictions. Seek an obligation to maintain the necessary registrations and licences, and to notify you of any event that threatens your continued use of them.

Also specify who will manage the defence if a third party alleges infringement of its trade mark, who will bear the costs, and how any settlement will be approved. If a dispute forces a change of name or signage, the agreement should address the costs of rebranding, business interruption and renewed marketing efforts, rather than simply offering a general promise of support. These are protections to negotiate and draft into the agreement, not automatic entitlements for every franchisee.

The practical takeaway: Before signing, obtain three connected pieces of evidence: protection of the trade mark in the UAE, your franchisor’s authority to grant rights to it, and an agreement that addresses what happens if that authority is lost or disrupted. If there is a break in this chain, postpone the purchase until the rights are clear in writing.