Buying a Franchise in the UAE: Request Written Disclosure Before Signing

When buying a franchise in the UAE, an attractive proposal and a draft agreement ready to sign are not enough. You need documented information that reveals obligations and risks which could change your decision. A balanced franchise relationship starts with enough time to understand the offer and ask questions. This guide explains how to request pre-contract disclosure and turn marketing material into a written reference you can rely on.

Understand what the law requires and what you need to negotiate

The UAE has no standalone federal law dedicated to franchising, nor a general federal regime requiring all franchisors to provide a standardised disclosure document within a specified period before signing. Do not assume that protections familiar from another country automatically apply to your deal, even if the brand is foreign and uses its international agreement template.

Depending on its nature, the relationship is governed by general civil law rules, including good faith and rules concerning defects in consent, and by the Commercial Transactions Law issued under Federal Decree-Law No. 50 of 2022, alongside relevant legislation on trade marks, competition and local licensing. Federal Law No. 3 of 2022 Regulating Commercial Agencies may apply to a franchise arrangement that meets its requirements and is registered as a commercial agency; not every franchise agreement is automatically a registered agency.

Ask a lawyer to identify the legal regime applicable to your arrangement, particularly if it involves a free zone with its own legal framework. The model agreements published by the Ministry of Economy and Tourism are useful for understanding an agreement’s structure, but they are neither disclosure documents for the brand you are considering nor government endorsements of its commercial viability. The absence of a generally mandatory disclosure template does not make misleading information permissible, but it makes documenting questions and answers all the more important.

Build your disclosure pack around information that affects your decision

Send a written request before committing, specifying the information you need and why. Avoid a vague request for ‘all information’; use a checklist the franchisor can answer and you can verify. Useful items include:

• The contracting party’s identity: Its legal name, registered office and any related companies that will receive payments from you or provide essential services.
• The franchise network’s history: The number of operating outlets, and outlets that have closed or changed operator over an agreed period, with explanations for significant changes.
• Material disputes: Claims or proceedings that could affect the franchisor’s ability to fulfil its obligations, to the extent disclosure is legally permitted.
• The franchisor’s financial position: Available financial statements or suitable evidence of its ability to continue operating and meet its obligations, rather than presentations about the brand’s growth alone.
• Documents setting out your obligations: The draft agreement and all its schedules, mandatory ancillary agreements, and a list of the manuals and policies referred to in the contract.
• Franchisees’ experiences: Contact details for current and former franchisees, with their consent and appropriate protection of their personal data.

Ask for the date on which each item was last updated, and clarification of whether it relates to the UAE or the global network. If the brand is entering the country for the first time, this should be clear: experience outside the UAE does not, on its own, demonstrate that the model has been tested locally.

Verify the answers and record what has not been disclosed

Keep a simple log for each request: the question, the answer, the supporting document, the date received and any issue still outstanding. Distinguish between information supported by documents, an explanation from the franchisor and a forecast. These do not carry equal weight when deciding what to rely on.

If a document cannot be provided on confidentiality grounds, suggest a confidentiality agreement, a redacted copy with sensitive details removed, or access for your adviser to review it. Withholding a document may be justified, but the practical result is still an information gap to assess, not a reassuring answer.

Compare the disclosure pack with what you hear in meetings. If you are told the network is stable but the list shows frequent changes of operator, request a written explanation. Ask franchisees about the accuracy of the information they received before signing and any surprises they encountered, rather than just their overall satisfaction.

Do not request customers’ personal data or other franchisees’ confidential information. Your aim is to test whether disclosure is consistent and sufficient, not to collect information you do not need for your due diligence.

Turn disclosure into a clear contractual commitment

Propose an agreed review period that starts once you have received the complete pack and is extended if a material change occurs. This is a negotiated period, not a general federal right specific to franchising. Also request a commitment to update material information until the signing date.

Review the ‘entire agreement’ clause and any acknowledgement that you have not relied on earlier statements with your lawyer. Such wording may make promises omitted from the contract harder to prove or rely on. Attach a dated list of important documents and answers, and specify which statements constitute contractual representations, who makes them and the limits of their liability for them.

Negotiate a clear process if a material omission or inaccurate statement comes to light before signing: supplying the missing information, conducting a fresh review, or withdrawing from the transaction on agreed terms. The consequences of discovering such an issue after signing require legal drafting that takes account of the applicable law; a general promise of compensation is not enough.

Practical takeaway: Before buying the franchise, prepare a disclosure checklist, a log of information gaps and a schedule of the information you are relying on. Do not sign an acknowledgement that your due diligence is complete while material questions still lack documented answers.