The founder of a business system (the franchisor) gives a person or group of individuals (the franchise) the right to operate a business selling a product or delivering a service using the franchisor’s business system. Franchisees are also allowed to use the franchisor’s branding, trademarks, and distinguishing marks as long as they follow those rules. Anyone considering starting a company as a franchisee should keep in mind that franchising binds the franchisee to a partnership arrangement with the franchisor for a set period of time.
In the 1950s, franchising reached a turning point. Ray Kroc, an Illinois entrepreneur, saw the opportunity of franchising a profitable southern California burger stand run by two brothers in 1954. McDonald’s is perhaps the most well-known example of franchising anywhere in the world. Though franchising is a cornerstone of the American business world, its advantages have not been without in other countries. It is slowly extending its presence in a variety of other countries. This is particularly true in emerging markets like China, India, Russia, Brazil, as well as the Middle East.
What is the best way to launch a Franchise Company in Dubai?
The franchise business model will be around for a long time. From McDonald’s and Starbucks, some of the world’s most well-known brands have benefited from it. The franchise economy was projected to be worth USD 30 billion at the end of last year, with a 27 percent average growth rate. This makes it the Middle East’s fastest-growing non-oil market. It’s really no wonder that the franchise business model is gaining traction in the region.
Dubai is already a successful investment destination, thanks to its 0% corporate and personal tax rates, ideal location, and simple business incorporation process. There’s a lot to like when you combine this with a tried-and-true business model. It is far from simple to run a profitable franchise. It requires talent, dedication, and motivation. However, with the right expertise and the assistance of a business setup consultant in Dubai, launching a franchise in Dubai can be both quick and simple.
How to begin a fresh Franchise Business in Dubai
- Examine the market and Franchise Opportunities
To get a greater understanding of the demand in your area you most likely already have an understanding of the kinds of companies that can prosper in your city. Info, on the other hand, will help you compliment your entrepreneur abilities. You can start the investigation by contacting the franchisors who have sparked your concern. You will get a Franchise Disclosure Form from each franchisor (FDD). Franchise disclosure forms (FDDs) are required under federal legislation and provide a variety of information regarding a franchise opportunity.
People start for existing franchises and franchisees who left the franchise system in the previous year is included in this information. You should use that information to reach out to former and current franchisees and ask about their interactions with the brand.
- Make a Business Strategy
Once you’ve agreed on a franchise, sit down and draught a detailed business plan. A marketing strategy will assist you with being prepared and pitching to buyers.
- Acquire Financial Assistance
For necessity, you’ll need enough starting money to pay your franchise fee and startup expenses, but you’ll also need operating capital to get you into the first step of your franchise journey. Here are several alternative funding sources:
- See item 10 of your franchisor’s FDD for more information.
- Friendships and kin.
- Banks and finance firms are two types of financial institutions.
- If you are unable to apply for a traditional loan, you could be eligible for an SBA-backed loan.
- Making or upgrading your place, attending training, and recruiting workers
Some franchisees are in charge of constructing or upgrading the location in which they will reside. The franchisor will supply blueprints, custom hardware, and signs, but you will need to employ a general contractor to construct and plan the room for opening day. You’d like to start organising your group when you’re constructing your physical place. Your franchisor will provide you and your staff with preparation prior to opening day. This preparation will help you get acclimated to the atmosphere of the franchise network you’ve joined.
- The Franchise agreement can be read and signed
The franchise agreement is a legally binding document that you and your franchisor have signed. As a consequence, you can have the document checked by an attorney before signing it. Be sure you fully comprehend the contract’s terms, and all of your rights and responsibilities.
Advantages of developing a Franchise Company in Dubai
After all, there are franchising advantages that any business owner should consider whether they want to achieve serious growth and are considering franchising. Listed out some advantages:
- A brilliant process of Capital Management
Many modern small businesses face the greatest expansion barrier: a lack of capital. Many entrepreneurs fail to meet their growth objectives due to a lack of resources and ability to finance them. Entrepreneurs can grow their companies by franchising without paying debt or equity costs. Businesses may benefit from the use of other people’s resources.
- Rapid Expansion
As markets get more competitive on a daily basis, many entrepreneurs worry that a competitor with more resources will beat them to the market with a similar concept. In this situation, franchising is the best way to ensure that they achieve much-needed market leadership before their rivals do. It offers this economic power in order for the startup to attain accelerated growth and compete for market share with larger and more experienced companies.
- Profitability Increased
Franchising Allows For Easier Supervision And Staffing Leverage, Enabling A Company To Achieve Greater Profitability. The franchisee will be responsible for all facets of the company, including recruiting, recruitment, site selection, lease agreements, accounting, local marketing, and all human resource matters. Nothing Less Than Increased Profitability Is the End Result.
- Company Quality Improve
Enhanced valuations are aided by accelerated growth, expanded performance, and improved organisational flexibility. When the entrepreneur decides to sell the company, the fact that he is a successful franchisor would benefit him. The venture would finally fetch him a decent enough price for him to transform another new business concept into a reality and then resell it after franchising.
- Extremely Reduced Probability
Generally, franchising lowers a business owner’s risk. Since the franchisee is responsible for all aspects of the company, including finances and operations, the owner is not liable. For a franchise option, the franchisor will grow as many units as they choose without having to pay for them out of pocket.
Recognizing the various forms of Franchise Businesses in Dubai
Before you can become a franchisee, you’ll need to think about the different setup choices.
The Dubai trade register recognises two different categories of franchises:
- Singular franchises: As a franchisee, you can market the franchisor’s goods and services to a single agency.
- Multi-unit / established franchises: A franchisee can open multiple units that are all run by the same company.
Starting a Franchise in Dubai is a Possibility
In order to open a franchise in Dubai, you have two options. The first is a franchise for food delivery. The second choice is to franchise a company format. The franchiser makes the goods and the franchisee actually sells them in a product delivery franchise.
Food distribution franchises are based on the food industry. It is one of the most successful and varied industries in the United Arab Emirates. Due to the large number of tourists who visit the region, there is a high demand for food-related services. Quick food restaurants are among the most popular. Food industry is dangerous because competition is fierce and new innovations are still in need. Both of the costs and benefits, though, must be weighed.
A product delivery franchise where Dubai is known as one of the best shopping destinations in the country. According to a report by the Dubai Chamber of Commerce and Industry, the country’s retail sector is forecast to expand at a 4.9 percent annual rate. Experts agree that the forthcoming Tourism sector would have an impact on the opening a company in Dubai. The UAE’s shopping market encompasses a wide range of ideas. Jewelry, children’s clothing, groceries, home decor, women’s clothing, and so on are among the most popular.
How to apply for a Business License
Since a franchise may be opened on the Dubai mainland or in a Dubai free zone, the latter is usually the most convenient and cost-effective choice. Owners of businesses in free zones will keep 100 percent of their ownership.
Several considerations will influence the licence and setup style that is best for you. Before you can open a franchise in the UAE, you must first complete several steps. They are:
- Choosing a Business Name
- Obtaining your trade licence
- Obtaining your visa
- For a business bank account
Are you ready to start your own business? Many people aspire to run their own business. Hundreds of thousands of people have realised their dreams by purchasing a franchise. These franchisees were able to draw on their franchisors’ market strength and industry experience and hit the ground running straight away. For businesses that want to reach their full potential, franchising is the best option. All that is needed is a brilliant business concept that can produce considerable income. A great business idea will generate tens of thousands of units all around the world. Entrepreneurs with incredible ideas no longer have to dream; with franchising, they will expand their companies beyond their wildest expectations.