Adapting a UAE Franchise Agreement Template for an Existing Business

An owner of a successful business in the UAE might begin their franchising journey by downloading an agreement template, replacing the names and fees, and signing it. But the template does not know how your business operates or what you can actually provide to a franchisee. The aim is not to make the contract longer, but to turn generic wording into an agreement that reflects your actual business model. This guide explains how to use a template as a starting point, rather than a substitute for preparing a suitable agreement and having it legally reviewed.

1. Understand the template’s assumptions before adapting it

Among its published resources, the Ministry of Economy and Tourism provides a restaurant franchise agreement template granting the right to operate the restaurant concept and a licence to use the associated intellectual property. According to its description, it assumes a single outlet at a fixed location, the application of UAE law, and obligations linked to acquiring ownership or leasehold rights over the premises and completing the required fit-out. It also includes an initial fee and an ongoing fee linked to turnover.

These are assumptions built into a particular template, not mandatory requirements for every franchise. Simply replacing the word ‘restaurant’ with your type of business is therefore not enough. An existing business may deliver services at customers’ premises, operate on a subscription basis, or generate digital sales that do not go through the outlet.

Start with a comparison sheet containing three columns: the template’s assumption, how the business currently operates, and the amendment required. Classify each provision as suitable, requiring amendment, or not applicable. Do not delete a provision simply because it is difficult to understand; first ask what purpose it serves. It may protect against a risk that exists in your business in a different form.

2. Establish the legal framework without treating the template as government approval

The UAE has no standalone federal law governing franchising alone, nor a general federal disclosure regime specifically covering all franchise agreements. Agreements operate within the general rules on contracts and civil transactions, the Commercial Transactions Law issued under Federal Decree-Law No. 50 of 2022, and relevant legislation on trade marks, competition and local licensing.

Federal Decree-Law No. 36 of 2021 on Trade Marks governs licensing the use of a trade mark. Federal Law No. 3 of 2022 Regulating Commercial Agencies may apply to a franchise arrangement that meets its conditions and is registered under it. You should therefore examine the nature of the relationship before assuming that the template’s provisions alone govern it. For businesses in free zones, the rules applicable to the relevant entity and location also need to be reviewed.

The fact that a template appears on a government website does not mean your amended agreement is approved or that your business is exempt from obtaining approvals. Official business set-up procedures make clear that selecting the business activity, legal form, trade name and premises, and obtaining approvals, are separate from the franchise agreement. Ask your legal adviser to identify the mandatory rules affecting your version, rather than merely reviewing its wording.

3. Prepare an operational description before the legal drafting

Before sending the template to a lawyer, prepare a short description of what the franchisee will actually receive. Specify the products or services, how they will be delivered, the assets the franchisee will use, and what remains their independent responsibility. Someone who was not involved in setting up the business should be able to understand the boundaries of the relationship from this description.

Give clear answers to questions such as:

• Is the right granted tied to a particular outlet or to a method of delivering a service?
• Does it include receiving orders through existing digital channels?
• Which software and equipment will the franchisor provide, and what must the franchisee purchase?
• Which obligations will the franchisor fulfil directly, and which depend on a third party?
• Does the franchisor have the right to make available every resource or system it promises to provide?

Then attach supporting documents from your existing business: a list of equipment in use, a description of the technology system, and relevant service contracts. Holding a software subscription for your own branch does not automatically entitle you to make it available to an independent franchisee. Adapting the template can reveal an operational gap before it becomes a contractual promise that is difficult to fulfil.

4. Turn general wording into obligations that can be fulfilled

Review the verbs used in the template, such as ‘provides’, ‘approves’, ‘assists’ and ‘undertakes’. For each one, ask: who must act, what outcome is required, when is it due, and what information is needed to fulfil the obligation? Do not leave wording such as ‘the franchisor will provide the necessary assistance’ open-ended if you mean a specific service.

For example, instead of a general promise to provide a technology system, explain whether the obligation is to provide account access, install equipment or coordinate with an independent supplier. State who pays the subscription, who receives fault reports, and what happens if the supplier stops providing the service. These are not cosmetic details; they define what both parties can expect.

Pay attention to terminology copied from the template, too. If it uses ‘turnover’, do not assume this automatically means payments received or sales recorded in your system. Replace ambiguous terms with definitions that fit the way your business operates, then ask the operations and finance leads to check whether they can be applied in practice before finalising the legal wording.

5. Test the amended version against real-life scenarios

Conduct a desk-based review involving operations, finance and your legal adviser. Test simple scenarios: an online order fulfilled by the outlet, a delay in providing software, or a franchisee needing a service that is not included. Ask each participant to identify the responsible party, the cost and the required procedure from the agreement itself, rather than from their personal knowledge of the business.

If their answers differ, the wording needs improvement. Keep a record of the provisions amended, the reasons for the changes and who reviewed them. Remove all blanks and internal instructions before presenting the draft for negotiation. Repeat the test if negotiations change a material obligation.

Practical takeaway: Use the template as a checklist of questions, not a ready-to-sign contract. Do not present it for signature until its assumptions match your business, its obligations have been tested in practice, and its legal review in the UAE is complete.