the link for Franchise Registration service is https://qayd.franchisecenter.sa/en

The service does not require a reviewer for applications before registering them with the Ministry; and in case of any violations, the penalties stipulated in the Franchise Law shall apply.

The franchisor must register the franchise agreement and the disclosure document with the Ministry of Commerce within 90 days from the date of signing the agreement.

The franchisor shall apply to the Ministry through the franchise platform for cancellation of registration within a period of ninety days from the date of its expiry or termination.

If the franchise agreement is amended by changing any of its parties or its term, the franchisor shall register the amendment of the franchise agreement with the Ministry within (ninety) days from the date of its completion, by depositing a signed copy of the amendment.
• What information shall the franchisor provide to the franchisee to clarify the financial position of the franchise model?
According to Article Thirteen of the Disclosure Document regarding the financial position information of the franchisor, he must provide either of the following:

A. A statement of the financial position of the franchisor at the end of its last fiscal year, signed by a manager or officer of the franchisor or its auditor, with a statement indicating the franchisor's ability to repay its debts on the due date.


B. Financial statements for each of the last two fiscal years, provided that they are prepared in accordance with the laws governing franchisor’s business.

Franchising has proven to be one of the most important ways to practice business activities in today's world, particularly for small and medium-sized enterprises. Franchising offers the right to use brands and provides administrative experience, continuous technical, technological and marketing support, mandatory training, as well as franchised goods and services. Under franchise agreements, the franchisor provides the franchisee with business models to practice the franchise activity. On the other hand, agency grants the right to sell the product, distribute and license the use of the brand. It may provide some limited support.

A franchise under which an investor is conducting a business activity similar to that of the franchisor and wishes to take advantage of the franchisor's operational and marketing capabilities. Merchants and business owners who welcome the idea can join a national or international branded franchise network and benefit from the business models and benefits associated with it. These independent businesses bear the same name, logo, benefits of mass buying, a larger customer base, wider advertising and competitiveness.

The franchise agreement specifies the terms under which the franchisor manages the company's business. It usually includes the rights to use the brand, the franchise business and its description, the obligations of the franchisor and the franchisee, the financial consideration for the franchise, support and training. It also determines the location, geographical area, duration of the contract, terms of renewal of the contract, terms of termination, and financial matters, including initial and ongoing fees. The contract and Disclosure Document must be registered with the Ministry of Commerce.

Brand development, success, competitiveness, and increasing profits and market share are essential goals for any franchise system, and marketing policies support the achievement of these goals. This is beneficial to all parties related to the franchise. It is necessary to understand that the franchisee's contribution ‘by paying marketing fees is in the interest of all franchisees and therefore is not considered a real source of income for the franchisor, but rather an investment in the brand.

As a franchisee, you will receive periodic visits from the franchisor's support team, as well as guidance on sales and inventory guidance, analysis, operational matters, updated policies and procedures, ongoing research for development, marketing materials, training courses, marketing-related presentations, and incentive programs on franchisees' performance as Franchisor of the Year programs.

One of the conditions set forth by franchisors is often that the franchisee be the actual owner of the business and be accountable for all contractual obligations, including financial and monetary duties, in order to assure their fulfilment. Given that the majority of the franchise's guarantee duties provide that the franchisor may lawfully sue the franchisee in person in the case of any irregularities or disputes, this amounts to an extra legal and financial guarantee for the franchisor.

The Franchise Disclosure Document contains the key rights and duties of the franchise and the substantial risks relating thereto, as well as information about the franchisor company, its operational and legal background, its business activity and its updated financial statements (optional) , assisting the potential franchisee in deciding whether or not to proceed with the franchise agreement. It is critical to thoroughly examine its provisions. Additional franchise-related enquiries can be directed to the franchisor and current franchisees. The franchisee may also obtain expert legal and financial advice before signing the agreement. The Franchise Disclosure Document shall be provided by the franchisor to the franchisee at least 14 days before the conclusion of the franchise agreement or from the date of payment of any consideration in respect of the franchise by the franchisee.

One of the main questions you can address to the franchisor is "What is the return on investment?" Conducting a financial study of the business is important to determine profits or losses through several factors such as the franchise area, activity location, and of course the franchisor's efforts and commitment to the tools of success.

By following the franchisor's regulations, the franchisee will be able to provide high quality goods and services that conform to the franchisor's products. Furthermore, the franchisee will be able to replicate the franchisor's success by satisfying consumers, increasing sales, and therefore generating profits, which is the aim of any investment.

Franchise whereby the franchisor grants rights that allow the franchisee to use the brand and know-how and sell products and services. This includes training the franchisee on all matters related to management and operation, including marketing, sales, inventory management, accounting and personnel procedures. Moreover, the franchisor provides support through continuous training and communication with the franchisee throughout the contract duration. The franchise of restaurants, retail stores, and many service companies is a well-known example of this type of franchise.