Document background
The Franchise Purchase Agreement is a crucial document used when establishing a franchise business relationship in Saudi Arabia. This agreement, governed by Saudi Arabian law and particularly the Commercial Franchise Law, serves as the foundational contract between a franchisor granting business rights and a franchisee purchasing those rights. It is essential for businesses looking to expand through the franchise model in Saudi Arabia, whether domestic or international franchisors. The document must comply with both Sharia principles and Saudi regulatory requirements, including mandatory disclosure obligations, registration with relevant authorities, and specific operational standards. The agreement covers all aspects of the franchise relationship, from initial purchase and setup to ongoing operations and eventual termination or renewal conditions. It's particularly important as it must address unique local requirements such as Saudization policies, cultural considerations, and local commercial practices.
