Managing Franchise Sales Promises in the UAE Before Signing

When you decide to franchise your existing business in the UAE, risks can arise long before the agreement is signed: a phrase in a presentation, a message promising a quick opening, or a verbal assurance that the franchisor will handle every procedure. Managing these promises is more than an exercise in wording. It protects trust within the franchise community and ensures that prospective franchisees buy into a model you can actually deliver. What you need is a clear system governing what can be said, who approves it and how it is documented.

Why is a carefully drafted agreement not enough?

Your agreement may define the scope of support carefully, while a salesperson tells a prospect: ‘You won’t need to oversee operations yourself.’ This creates a gap between the expectation that prompted the prospect to apply and the commitment you intend to fulfil. Nor should you assume that signing the agreement automatically removes the effect of earlier correspondence or presentations: their legal significance depends on the facts and the applicable rules.

The UAE has no standalone federal franchise law, nor a general federal regime requiring a standard disclosure document or a specific disclosure period for all franchise offers. However, the absence of such a regime does not mean you are free to provide misleading information or make promises you cannot fulfil. The general contract rules in the Civil Transactions Law and Federal Decree-Law No. 50 of 2022 on Commercial Transactions apply, depending on the nature of the relationship.

Federal Law No. 3 of 2022 Regulating Commercial Agencies may also apply if the arrangement meets its requirements and is registered under it. Federal Decree-Law No. 36 of 2021 on Trademarks governs the trademark rights you are offering to license. Have your sales materials reviewed by a UAE legal adviser, and do not present disclosure requirements or waiting periods from another country as UAE legal obligations.

Create a register of promises before speaking to prospects

Gather your introductory presentation, franchise application pages, message templates and standard answers to common questions in meetings. Identify every statement a prospect could interpret as a commitment, even if it does not use the words ‘we commit’. Focus on opening the business, operational support, staffing, technology and access to suppliers.

Create an internal record for each promise covering:

• Approved wording: The statement the team can use without substantive changes.
• Scope of delivery: What will the franchisor provide, and what does the promise exclude?
• Conditions and dependencies: What depends on the prospect, a government authority or an external supplier?
• Person responsible: Who within the company has confirmed that the promise can be fulfilled?
• Evidence of capacity: Available resources, an established process or a documented agreement with the service provider.

For example, replace ‘We obtain all your licences for you’ with wording that describes the help you actually provide, such as preparing and reviewing a document checklist. Specify who is responsible for submitting applications and securing approvals. Business set-up procedures in the UAE may require additional approvals depending on the activity, and initial approval is not permission to begin operating.

Do not turn a previous opening experience into a guaranteed timetable for every location. If you give an estimated timeframe, explain when it starts, the assumptions behind it and what might cause delays. The experience of opening one outlet demonstrates expertise; it does not guarantee how quickly external parties will act.

Set limits on negotiating authority and intermediaries

Divide statements into three categories: established information that can be shared, estimates whose assumptions must be explained, and exceptions requiring written approval. An employee can explain the approved application process, but must not promise extra support or exemptions from operational obligations without referring to the appropriate decision-maker.

Apply the same rules to brokers and consultants marketing the opportunity on your behalf. Give them approved, dated materials, define a process for requesting changes and require them to stop using outdated versions. A general prohibition on exaggeration in a brokerage agreement is not enough if the broker is circulating a presentation you have never reviewed.

After every substantive meeting, send a written summary setting out what was discussed, what remains under consideration and what requires further approval. If you discover an unauthorised promise, correct it promptly and clearly before negotiations continue or you accept any payment connected with it. Simply changing the wording in the next presentation, without informing the prospect who received the original statement, is not enough.

It also helps to assess your sales team on more than the number of agreements signed. Include measures such as complete meeting records, prompt correction of information and the absence of unauthorised exceptions, so that exaggeration does not become a shortcut to closing a deal.

Check expectations before signing

Set aside a final meeting to compare the prospect’s understanding with the approved offer, rather than repeating the sales pitch. Ask them to describe what they expect from the franchisor during set-up and after opening, then discuss any differences point by point. This can reveal assumptions that may not emerge if you simply ask: ‘Do you have any questions?’

Pay particular attention to who will manage the business day to day, who will deal with the relevant authorities, the limits of assistance with site selection and recruitment, and the nature of technical support. Following review, document any agreed special commitment in the appropriate contractual document. Do not leave it in a separate conversation that the delivery team cannot see.

Keep a dated copy of the materials the prospect received, together with relevant corrections and approvals, then give the operations team a summary of the commitments accepted. The prospect’s acknowledgement of receipt is a means of documenting the process, not a substitute for accuracy or a way to absolve the franchisor of responsibility for the information it provides.

Practical takeaway: Before marketing your first franchise, create a register of promises and define who can approve them. Every promise should have a clear scope, be achievable and be understood by the team responsible for fulfilling it.