As a global business hub and one of the best places in the world to do business, it’s hardly surprising that Dubai is a popular spot for international and regional franchises. With its fast-growing population, year-round high tourism levels and diverse demographic, the opportunities for international and local franchise businesses are lucrative and far-ranging. So, if you’re considering setting up a franchise business, the UAE – and Dubai specifically – is an excellent launchpad.
Franchise Industry in Dubai: Overview
Dubai is one of the most successful franchising hubs in the Middle East and has grown rapidly in the past 20 years. Its strong consumer market, high levels of tourism and strategic location, coupled with its investor-friendly environment and business-friendly regulations, make it a popular option for investors and international companies looking to scale their businesses quickly.
The UAE actively encourages foreign investment with incentives like 100% foreign ownership and free zone and mainland structures, as well as a whole string of benefits that make it easier to set up franchise operations. However, given the favourable environment, those setting up a franchise will need to face high competition, expensive retail space and cultural and consumer behavioural differences that will require localisation.
Food and beverage (F&B) tops the list when it comes to franchising, with fast food, coffee shops and casual dining restaurants like McDonald’s, Tim Hortons, Starbucks and Nando’s found across the city. Retail brands like Zara and Sephora are also well established here, as well as health and fitness centres such as F45. Other popular franchise sectors include education, beauty, real estate and cleaning services.
How to start a franchise business in Dubai: Step-by-step
Launching a franchise business in Dubai is less straightforward than setting up a business from scratch, but the government has made the process easier than other popular franchise hubs thanks to business-friendly regulations, fast application process and visa processing. We’ve broken down the process into five steps to give you an idea of how long the process takes and what to expect along the way:
Step 1: Choose the right franchise
Franchise models are popular and offer lucrative opportunities for entrepreneurs and investors, but you need to ensure you choose the right one. To give your business the best chance of success, research the Dubai market and its consumer trends, demographics, competition and spending behaviours. F&B, beauty and fitness are popular sectors, but they are competitive too. You should also request a Franchise Disclosure Document (FDD) (if USA-based) or equivalent from the franchisor to understand the business model, fees, royalty structures, training and other factors, like marketing support.
Step 2: Develop a business plan
The next step is to create a business plan and consider how you are going to secure funding. Ideally, your plan will include a market analysis, strategy, objectives and financial projections. You will need to work out how much investment is needed at this stage too, so take the time to work out franchise fees, startup and rental costs and other costs, such as marketing and staff costs. When it comes to financing, you might want to consider bank loans or private investors. Dubai is renowned for nurturing businesses at the beginning of their journey and many banks offer SME-friendly loan programmes, but there are specific pre-requisites.
Step 3: Decide on the structure of your business
The three most popular structures for franchises in the UAE are mainland, free zone and offshore. Each has its advantages, for example, mainland companies offer the opportunity to operate across the whole of the UAE without restrictions, while free zones offer benefits like simplified setup and tax incentives. We recommend working with a reputable business setup consultancy like Set Hub to ensure you have considered the best option for your business.
You will also need to sign a franchise agreement, a legally binding document that outlines your rights and requirements, with the franchisor.
Step 4: Register and apply for your licenses
All businesses require a license to operate legally in the UAE. Once you have a franchise agreement and legal structure in order, you can apply for the relevant licenses. Typically, you will need to provide a completed application form, along with passport copies, franchise agreement, lease agreement, business plan, trade name reservation certificate and initial approvals. You may also need to provide additional permits, depending on the nature of your business, from regulatory boards like Food Control and Civil Defence. If your franchise involves imports, you may need to obtain import/export codes.
Step 5: Launch your franchise
Once you have sorted out all the legal requirements, you can launch your business. You’ll need to set up a physical location, hire staff and execute a marketing launch strategy. The franchisor might provide training for you and your team, as well as approved materials and messaging for your marketing strategy.
Benefits of starting a franchise business in Dubai
Business-friendly environment
Business owners in Dubai can enjoy 0% income tax, 0% capital gains tax and 100% ownership. Free zones offer simple and straightforward business setup, making it easier and faster to set up a franchise too.
High-spending consumer market
Dubai boasts a diverse population of over 200 nationalities. In fact, over 90% of the population are expats. This not only means that consumers are willing to spend, but that they are willing to spend on brands they may be familiar with from back home. The city also attracts millions of tourists every year, boosting demand for international brands.
Prime retail infrastructure
Dubai boasts some of the most popular retail destinations in the world with high foot traffic, ranging from Dubai Mall to JBR Walk. Public transport is first-rate and advanced logistics make it easier to manage supply chains and operations more effectively.
Skilled workforce
Dubai offers a large pool of skilled workers and businesses can hire talent from across the world thanks to the UAE’s streamlined immigration system. The government also offers freelance visas and golden visas, making it even more appealing to hire international talent.
Strategic location
Dubai is the gateway between the East and West, making it an excellent option for regional franchises with plans to expand across the GCC, Africa and Asia. Plus, the city is home to major transport hubs like Dubai International Airport and Jebel Ali Port which offer global connectivity and more efficient supply chains.
Reduced risk
Franchising is less risky than starting a new untested business model, since it operates under a trusted brand and can immediately attract customers. Franchise owners can utilise tried-and-tested marketing strategies, operation systems and supply chains, reducing the need for trial-and-error approaches, which reduces time and saves money.
Start your franchise business with Set Hub.
At Set Hub, we’re experts in business setup in Dubai. Dedicated to making business setup in Dubai straightforward and hassle-free, our goal is to get your business up and running with minimal stress. We provide end-to-end support across all stages of your business journey, from company registration and visa applications to opening corporate bank accounts and managing tax. With local knowledge and regulatory expertise, we make it easier to navigate key aspects of doing business in the UAE too.
Thinking about launching a franchise in Dubai? Reach out to our team to find out how we can help you build a successful franchise in Dubai as your long-term partner for success.
