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09
APR
2021

Franchise Agreement Saudi Arabia

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Yes, this obligation is imposed on the franchisor and franchisee in the Franchise Act. Language obliges both parties to engage in good faith in their commitments. In addition, the duty of good faith is imposed on the contracting parties by the general principles of Sharia law. 13.1 Is there a mandatory obligation for a franchisor to deal with a franchisee in good faith and to act fairly with franchisees on an objective test of fairness and adequacy? 1.12 Is it necessary to translate franchise or disclosure documents into the national language? Yes, it applies to sales to sub-franchisees and, in this case, the principal franchisor is required to make disclosure to MOC in accordance with the Franchise Act, as if it were the franchisor for all purposes and intent. 1.2 What laws govern the supply and sale of franchises? 8.2 Are there any restrictions on a franchisor requiring a former franchisee to assign local domain names to the franchisor in the event of termination or expiry of the franchise agreement? The franchise law defines the franchisor`s primary obligations in a franchise agreement. While many obligations may be excluded from the contracting parties, others are mandatory. 5.2 In the case of Lower Franconia, what is the liability for non-compliance with disclosure or pre-contract misrepresentation between franchisees and franchisees? If the franchisor obtains compensation from the principal franchisor in the franchise master contract, are there any restrictions on such compensation, which can be imposed on the franchisee? If .B. if it is found that the franchisor has a substantial breach of its registration and advertising obligations under the Franchise Act, the franchisee has the right to terminate (i) the franchise agreement without compensating the franchisor for such termination (Article 17 of the Franchise Act), or (ii) to claim harm suffered by the franchisee as a result of such an infringement. without terminating the franchise agreement (Article 19 of the Franchise Act). We note, however, that sections 17 and 19 of the Franchise Act do not apply, among other things, to existing franchise agreements.

Yes, the franchisor is required to register prior to the execution of the franchise agreement and submit a disclosure document to MOC. 9.2 Are there local rules that impose a minimum period of termination that must be given to terminate a business relationship that has existed for several years and which applies regardless of the duration of the franchise agreement? Under section 7 of the Franchise Act, the franchisor must provide the franchisor with a copy of the disclosure document at least 14 days before the franchise agreement is signed or the date the franchisee makes a payment “in relation to the deductible.” While the payment of a deposit by the franchisee would likely trigger the advertising obligation, it is not certain that simply signing a Memorandum of Understanding would trigger the advertising obligation. The disclosure document and franchise agreement should not be written in Arabic, but if they are written in a language other than Arabic, a certified translation of the disclosure document and franchise agreement must be made in Arabic. Section 7 also states that the disclosure document must be clear and precise.

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