Buying a Franchise in the UAE: Keeping Technology Costs Under Control

Point-of-sale system and ordering app fees may seem like minor details when buying a franchise in the UAE, but they can become ongoing commitments that are difficult to change. Across a franchise network, standardised systems help monitor performance and deliver consistent service. Their benefits, however, do not justify accepting open-ended costs or relying entirely on an account controlled by someone else. Assess technology as a contractual and operational commitment, not simply as equipment purchased for opening day.

1. Identify the mandatory systems and who you will contract with

Start by requesting a written list of every system you must use: point of sale, stock management, accounting, online ordering, loyalty programmes and reporting dashboards. Distinguish mandatory systems from optional tools, and ask whether the quoted price covers what you actually need to run your outlet or only a basic licence requiring paid add-ons.

For each system, record the service provider’s name, who signs the subscription agreement, who issues the invoice and who has administrator access to the account. You might pay the franchisor while an external company handles support, or contract directly with a supplier that is not bound by promises made by the franchise sales team.

Before signing, request copies of the terms of use, support terms and pricing schedules referenced in the franchise agreement. Pay particular attention to terms you will be asked to accept electronically later: opening your business should not be your first opportunity to discover a binding subscription term or cancellation fees.

Also ask: if the franchisor’s relationship with the supplier ends, will your service continue? Who will bear the cost of switching? The aim is not to challenge standardised systems, but to avoid a gap between the party requiring them and the party responsible for keeping them running.

2. Turn the quote into a full operating cost

Do not compare franchise brands solely on the price of a payment terminal or monthly subscription. Request an itemised quote covering set-up, configuration, data migration, technical training, system integration, maintenance and hardware replacement. Keep these amounts separate from franchise fees so you know what you are paying for each service.

Check the pricing units carefully. Is the subscription charged per outlet, device or user? Are there fees for each order, message or integration transaction? Does exceeding a transaction threshold automatically move you to a higher-priced plan? Also check whether prices include or exclude applicable taxes.

Draw up a cost schedule for the first year and subsequent operating years, and test the impact of adding staff, devices and orders. Do not assume that higher sales will always reduce the relative cost burden: usage charges may rise alongside them.

Negotiate a written process for price changes, including advance notice, a limit on increases or a method for calculating them, and your options if a product is discontinued or a replacement becomes mandatory. If the franchisor requires you to switch to a new system, ask for clarity on who pays for migration, training and any period of running both systems in parallel. These are points to negotiate, not automatic rights granted to every franchisee.

3. Agree on outage procedures and access to your business records

Imagine the system going down during a busy period. Can you record sales using an approved alternative method? Who takes the support request? Is support available throughout your outlet’s opening hours, or only during the supplier’s office hours? Request a clear service level agreement that distinguishes an outage preventing sales from a minor issue, and sets response times and an escalation process.

Do not confuse response time with resolution time: a message acknowledging your support request does not get your shop trading again. Discuss business continuity procedures, backups, service recovery and any remedies that can be agreed for repeated outages. Do not assume that a subscription credit will cover losses caused by business interruption.

Also check that you can export sales and stock reports, invoices and reconciliation records in a usable format. Ask for a practical demonstration of a report export, rather than a verbal assurance that the data is ‘available’. Specify who has access rights and how access will be revoked when staff leave.

Do not treat customer data as property you own outright and can share without restriction under the contract. Access, use and export permissions must comply with applicable data protection rules. When the relationship ends, request an orderly process for obtaining the records your business is entitled to retain, with clear timescales, costs and confidentiality safeguards.

4. Link the technology schedule to the UAE franchise agreement

The UAE has no standalone legislation governing franchising and no mandatory disclosure regime specifically for franchise sales. The relationship is governed by general rules on contracts and civil and commercial transactions, including Federal Decree-Law No. 50 of 2022 issuing the Commercial Transactions Law, alongside intellectual property laws and other relevant rules.

Federal Law No. 3 of 2022 on the Regulation of Commercial Agencies may apply if the relationship meets its requirements and is registered as a commercial agency. Do not assume that simply calling an agreement a ‘franchise’ gives you special protection against rising subscription fees or service interruptions. Contract wording matters, within the limits of the applicable law.

Bring the technology obligations together in a signed schedule, and specify which documents take precedence if it conflicts with the supplier’s terms. Ask a lawyer to review liability limits, account suspension, fee changes and the franchisor’s obligations where a third party provides the service.

Practical takeaway: Before signing, obtain a complete list of systems and prices, a written outage plan and a process for exporting your business records. If you cannot establish the cost, who is responsible and how you will access those records, do not consider the technology arrangements settled.