Set Up a Franchise Business in the UAE: What You Need to Know in 2025

Thinking about starting a franchise business in the UAE in 2025? You’re not alone. The UAE is one of the most popular places in the Middle East for business, and the franchise sector is booming. 

In 2024, the MENA franchising sector was valued at $33 billion, experiencing a 29% annual growth rate. The UAE’s food and beverage (F&B) sector alone was valued at $8.9 billion in 2022 and is projected to grow by a 9% compound annual growth rate (CAGR) by 2026 

Whether you’re planning to open a restaurant, grocery store, café, fashion outlet, or even a service-based business like dry cleaning or car repair, there’s a place for you in the UAE franchise market.

Looking for Franchise Ideas?

Here are some popular business types that work well as franchises in the UAE:

Business Types That Can Start a Franchise in the UAE

• Restaurants and Fast Food
  
• Coffee Shops
  
• Convenience Stores and Groceries
  
• Fashion and Beauty Retail
  
• Dry Cleaning and Laundry Services
  
• Car Rental
  
• Health and Fitness Centers
  
• Education and Training Centers
  
• Tutoring and Early Learning Centers
  
• Courier and Logistics Services
  

What Does Franchising a Business Mean?

Franchising a business means allowing someone else (the franchisee) to operate a business using your brand name, business model, and support system in exchange for a fee. As the business owner (the franchisor), you provide the franchisee with training, marketing tools, and ongoing support to help them run the business successfully while maintaining your brand standards.

How to Start a Franchise in the UAE

Starting a franchise business setup in the UAE begins with research. You need to look at the local market. Understand what people want. Learn what’s already out there. See what gaps you can fill.

Good news, new rules in the UAE now let foreign investors fully own businesses in many sectors. That means you don’t always need a local sponsor anymore. This change is opening more UAE franchise opportunities in 2025.

Once you know what kind of business you want to run, choose your franchise type. You can choose a single-unit franchise, which means opening one store, or a multi-unit franchise, which means opening several locations.

Pick the Right Franchise

Don’t rush this step. Think about your interests, budget, and experience. Some popular options include:

• Restaurants and cafés
  
• Grocery stores
  
• Fast food outlets
  
• Retail shops
  
• Fitness centers
  
• Beauty salons
  
• Educational services
  
• Car repair shops

Attend franchise expos or speak with current franchise owners. You can also get help from a franchise consultant. And make sure to ask for the Franchise Disclosure Document. It gives you key info about the company.

Make a Business Plan

Every franchise business setup in the UAE needs a solid business plan. Whether you’re opening a restaurant, a grocery store, a beauty salon, a fitness center, or a retail shop, a plan helps you stay focused and organised. It also shows investors and licensing authorities that you’re serious and prepared.

Your plan should explain what your business does, who your customers are, how you’ll make money, and how you’ll operate day to day. If you’re starting a restaurant, include details like menu ideas and seating layout. For a grocery store, talk about suppliers and inventory. For a salon, focus on services, staff, and client experience.

If you need help selecting a business idea, you can take a look at our blog on the best business ideas in Dubai.

You’ll also want to include your marketing plans, pricing, and expected income. List your startup costs and how you plan to cover them. A clear plan also helps if you need a loan or investor support.

Secure Funding

Once your plan is ready, think about how to fund your business. Most franchises require an upfront fee, plus costs for setting up your location, buying supplies, and covering initial salaries. In the UAE, you can apply for small business loans or talk to private investors. You can also consider a business partner if needed.

The cost of opening a franchise in the UAE varies. For small outlets, you may spend around AED 20,000 to AED 50,000. For larger or well-known brands, costs can go much higher. Your location, licence type, and sector will affect your total investment.

Choose Between Free Zone or Mainland

Decide where you want to open your business. You can choose a Free Zone or the Mainland. Each has its benefits.

Free Zone Benefits:

• 100% foreign ownership
  
• Tax breaks
  
• Fast setup
  
• No import/export duties

But:

• You may not be able to trade directly in the local UAE market unless you hire a local distributor.

Mainland Benefits:

• Trade anywhere in the UAE
  
• No limits on your business activities
  
• Strong local presence

But:

• You may need a local partner, depending on the industry
  
• Rules can be stricter

Register Your Business

Now it’s time to register your company and apply for a trade licence. This step is essential for legal operations and follows franchise business regulations in the UAE.

You’ll need to pick a business name, choose your legal structure (like an LLC), and submit documents to the Department of Economic Development (DED) if you’re setting up on the Mainland. If you’re setting up in a Free Zone, you’ll apply through the Free Zone authority. The documents usually include your passport copy, visa, and proof of address. You’ll also need permission from the franchisor and sometimes other authorities, depending on your business activity.

Once approved, pay the fees and get your licence. Some industries like food, healthcare, or education require extra permissions from local authorities.

Apply for a Visa

Next, apply for an investor visa. This visa lets you live and work in the UAE as a business owner. It usually lasts for three years and can be renewed. If you plan to hire staff, you’ll need to sponsor their work visas too.

You and your employees must also take a medical test and apply for an Emirates ID. This ID is required for most government and banking services in the UAE.

Sign a Franchise Agreement

The franchise agreement is a legal contract. It explains the rules between you and the franchisor. It will include:

• Franchise fees
  
• Duration of the agreement
  
• Location rights
  
• Advertising costs
  
• Training and support
  
• Quality rules
  
• Profit sharing

Always get a lawyer to help review this contract. The agreement must also be approved by a UAE court.

Open a Corporate Bank Account

You need a corporate bank account to run your franchise operations in Dubai or anywhere in the UAE. Different banks have different requirements. You’ll need:

• Business plan
  
• Personal and company bank statements
  
• Your company documents
  
• Your CV

Choose a bank that understands franchise businesses. If you need help, business setup consultants in the UAE can guide you.

Find a Location

Pick a location based on your target customers. Look at foot traffic, access, nearby competition, and rent costs. Make sure the lease fits your long-term goals. Also, check that the location follows local rules.

Build and Launch

Once you have a location, prepare it. Follow the franchisor’s rules. Buy the needed equipment. Train your staff.

Before you open, plan your marketing. Use online ads, social media, and local promotions. Some franchisors offer help with your grand opening. Take full advantage of that.

What Are the Costs?

The cost to open a franchise in the UAE depends on your business type and where you open it. Here’s a rough idea:

• Trade licence: AED 10,000 to AED 50,000
  
• Business registration: AED 1,000 to AED 10,000
  
• Visas: AED 2,000 to AED 5,000 each
  
• Office or shop rent
  
• Franchise fee and startup costs
  

So, the total startup cost for opening a franchise in the UAE in 2025 can be anywhere from AED 20,000 to over AED 100,000. Costs can go even higher for bigger brands. A business consultant can help you get a clear estimate.

Why Start a Franchise in the UAE?

Let’s look at why starting a franchise business in Dubai or other emirates makes sense:

1. Shared Marketing and Branding

Franchises come with ready-made branding. You don’t have to build your brand from scratch. That saves time and money.

2. Strong Economy

The UAE economy is stable. It’s powered by oil, tourism, finance, and trade. That makes it a great place to invest. In 2025, the UAE’s GDP is projected to reach $487.2 billion, reflecting a growth rate of 5.1%.

3. Big Urban Population

Over 80% of people in the UAE live in cities. That’s a ready market for your products or services.

4. Tax Benefits for Franchise Businesses in the UAE (2025)

• 0% Corporate Tax in Free Zones: Franchise businesses operating within UAE Free Zones that meet specific criteria can benefit from a 0% corporate tax rate on qualifying income.
  
• Small Business Relief: Businesses with annual revenues not exceeding AED 3 million can elect to be treated as having no taxable income, effectively reducing their corporate tax liability to zero. This relief is available until 31 December 2026.
  
• Refundable Tax Credit for High-Value Employment: Effective from 1 January 2025, businesses hiring highly skilled professionals in sectors like technology, finance, research and development, and healthcare can claim a refundable tax credit calculated as a percentage of eligible salary costs.
  
• Research and Development (R&D) Tax Incentives: Starting from 1 January 2026, businesses investing in R&D activities within the UAE can benefit from an expenditure-based tax credit ranging from 30% to 50%, supporting innovation and technological advancement.
  
• Loss Carryforward Provision: Franchise businesses can carry forward tax losses to offset future taxable profits, providing financial relief during less profitable periods and enhancing long-term sustainability.
  
• Group Taxation Benefits: Franchise groups with multiple entities in the UAE can form a tax group, allowing them to file a single consolidated tax return and offset profits and losses among group members, optimizing the overall tax position.
  
• Business Restructuring Relief: The UAE Corporate Tax Law provides tax relief on mergers, spin-offs, and other corporate restructuring transactions where the whole or an independent part of the business is being transferred in exchange for shares or other ownership interests, provided certain conditions are met.
  
• Intra-Group Transfer Relief: Tax relief is available on intra-group transfer of assets or liabilities between taxable persons that are members of the same qualifying group, subject to specific conditions.

Final Thoughts

Franchise business setup in the UAE offers great opportunities in 2025. Make sure you understand the legal process for franchises in the UAE. Know what the franchise licensing requirements in UAE are. Stay updated on market trends and customer needs.

Whether you’re a local entrepreneur or a foreign investor, franchise ownership in the UAE can be a smart move. Get the right help, choose a strong brand, and take the first step toward building your own business.

Need Help?
Looking to explore UAE franchise investment opportunities? Get in touch with a professional business setup consultant like Bestax. They can guide you through the franchise registration process in the UAE and make it easier to open a successful franchise in the UAE.

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Disclaimer: The information provided in this blog is for general informational purposes only. For professional assistance and advice, please contact experts.