Buying a Franchise in the UAE: Checking Your Right to Use the Trade Mark

You may choose a franchise because its name is well known, but recognition does not prove that the trade mark is protected in the UAE or that the franchisor can license it to you. In franchising, you pay for specific rights to use a brand, not ownership of the name itself. Trade mark checks should therefore go beyond a general enquiry and involve reviewing documents and contractual terms before you pay non-refundable fees or order branded signage.

Check the trade marks you will actually use

Start by requesting a list of the trade marks your outlet will use: the name, logo, Arabic and foreign-language versions, and any specific product or service names. The registered trade mark may differ from the branding shown in the sales pack, and some elements may only be covered by pending applications.

Ask for UAE registration certificates, renewal details, pending application numbers and the owner's name for each trade mark. Then instruct a specialist to verify their status with the relevant authority, rather than relying on a copy of an old certificate or a registration issued in another country. Having international branches does not, on its own, establish local protection.

Review the goods and services covered by the registration, not just the name. If the franchise model combines providing a service with selling branded products, request a statement explaining how far the registration covers each intended use. Do not assume that protection for a particular logo automatically extends to every Arabic wording or alternative design.

Create a short table covering:

• The trade mark and version customers will see.
• Its registered owner, registration status and period of validity.
• The goods or services covered.
• Its proposed use in your outlet and across its digital channels.
• Any discrepancy that needs explaining or resolving before you sign.

Understand the legal framework and licensing chain

The UAE has no standalone federal franchise law, nor a franchise-specific federal disclosure regime requiring a standard document and a general pre-signing disclosure period. The relationship is governed by the general rules on contracts in the Civil Transactions Law, the Commercial Transactions Law issued under Federal Decree-Law No. 50 of 2022, and legislation applicable to the business activity and intellectual property.

For trade marks, Federal Decree-Law No. 36 of 2021 on Trade Marks is a key reference. It is important to distinguish between registering a trade mark and licensing its use: buying a franchise does not transfer ownership of the trade mark to you. Ask your lawyer to identify the requirements for formally documenting the licence, whether it can be recorded and the effects of doing so, based on how the arrangement is structured. Do not assume that registering a franchise agreement is a general mandatory requirement.

Federal Law No. 3 of 2022 Regulating Commercial Agencies also needs to be considered if the relationship meets the conditions for a registered commercial agency; it does not automatically apply to every franchise.

If your franchisor is not the registered owner of the trade mark, request the document authorising it to license the mark to others. Focus on the scope and duration of that authority and the uses it covers. A redacted copy may be provided to protect confidential information, but it must not conceal the sections needed to establish the right to grant you the required licence.

Make the scope of use clear in the contract

Do not settle for a statement that ‘the franchisee may use the trade mark’. Attach a specific list of licensed trade marks and link them to the activities you will carry out. Specify whether the licence covers signage, packaging, uniforms, local advertising, social media pages, and listings on delivery or booking platforms, as appropriate for your business.

Ask about the approval process for local uses: who approves translations of the name or advertising materials? What documents are required? What is the agreed response time? Do not treat the franchisor's silence as approval unless this is expressly addressed in appropriately drafted terms.

Also seek a clear undertaking from the franchisor that it has the necessary authority to grant the agreed rights and will maintain the registrations and authorisations it needs throughout the licence term. Specify its duty to notify you of any challenge or proceedings affecting your ability to use the trade marks.

These are points for negotiation, not automatic protections for every buyer. Their value depends on their inclusion in binding documents and their compliance with the law. The schedules must also be consistent with the agreement, so that a broad right granted in one clause is not taken away by a vague exception in another schedule.

Allocate responsibility for challenges and rebranding costs

Before committing, request a written statement of any known dispute or challenge concerning the licensed trade marks in the UAE. A challenge does not necessarily mean you should rule out the opportunity, but it does call for an independent legal assessment of its potential impact on operations.

Discuss a practical scenario: what happens if another party demands that you stop using the name? Specify who handles the response, who appoints the lawyer, who pays the costs, and how any settlement affecting your outlet will be approved. Avoid accepting open-ended liability for rights the franchisor has granted you, while distinguishing between authorised use and any misuse on your part.

If continued use becomes impossible, negotiate a specific solution: legal steps to resolve the issue, an acceptable alternative, or a right to exit with a financial settlement on clear terms. Also discuss the cost of replacing signage, packaging and advertising materials, and updating digital channels. Do not leave these matters to a general statement about ‘cooperation between the parties’.

The practical takeaway: Do not pay for a name until you have checked its protection, the licensing chain and the limits on your use of it. Gather the evidence and allocate responsibility for challenges and remedial costs in the contract before buying.