Article 22 of the Saudi Franchise Law
المادة 22 من نظام الامتياز التجاري · الفصل الحادي عشر: أحكام ختامية
The agreement to use any trademark or trade name connected with the franchise ends when the franchise is assigned, terminated, ends or is not renewed.
Official text (Arabic)
This article has not been amended since the law was issued.
يترتب على التنازل عن اتفاقية الامتياز وأعمال الامتياز أو إنهائها أو انقضائها أو عدم تجديدها؛ انقضاء اتفاقية استخدام أي علامة تجارية أو اسم تجاري مرتبط بأعمال الامتياز، وتحدد اللائحة إجراءات ذلك.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 22 explained in plain English
This article deals with the fate of the trademark and trade name after the franchisee's relationship with the franchise ends.
The rule: Any of the following results in the ending of the agreement to use any trademark or trade name connected with the franchise business:
- Assignment of the franchise agreement and business;
- termination of the agreement;
- its ending;
- its non-renewal.
The logic is that the franchisee's right to use the mark or trade name is tied to the franchise itself: under the definition of franchise in Article 1, the franchise business is carried out "tied to the trademark or trade name" owned by the franchisor or that he is licensed to use. Once the relationship ends, the basis on which the right of use rests ends too.
The procedures: The article does not set out the practical steps for this, but provides that the Implementing Regulations set the procedures for this ending, so they should be consulted to know them.
It is preceded by Article 21, which sets the periods for not hearing compensation claims, and followed by Article 23, which makes void any agreement by which the franchisee waives his rights under the Law except in a final settlement or as the Law permits. Anyone who needs to arrange the transfer of operating the shop after the franchise ends can consult a lawyer who specializes in commercial cases.
Practical example
The franchise agreement for a coffee shop run by Bandar in Hail ended and was not renewed. Under this article, his agreement to use the trademark and trade name connected with the franchise also ends, so he cannot rely on the ended agreement to keep operating under the brand name, and the Implementing Regulations set the procedures for this.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 22 of the Saudi Franchise Law
Can I use the brand name after the franchise contract ends?
The article provides that the agreement to use any trademark or trade name connected with the franchise business ends when the agreement is assigned, terminated, ends or is not renewed.
If I sell the franchise to someone else, does my right to the mark end?
Yes. Assigning the franchise agreement and business results in the ending of the agreement to use the trademark or trade name connected with it.
What are the procedures for ending use of the trademark?
The article refers to the Implementing Regulations to set the procedures for this.
More articles on Assigning the Franchise Agreement
- Article 13
The franchisee must obtain the franchisor's approval before assigning the franchise or changing its controller, and the franchisor may not object or withdraw approval except in specified cases.
ما لم تنص اتفاقية الامتياز على غير ذلك، يجب, قبل تغيير الشخص الذي يسيطر على صاحب الامتياز أو التنازل عن اتفاقية وأعمال الامتياز إلى الغير، أن يحصل صاحب الامتياز
- Article 14
The franchisor is treated as having consented to an assignment of the franchise or a change of controller if he does not respond in writing to the franchisee's written request, as the Implementing Regulations specify.
مع مراعاة أحكام المادة (الثالثة عشرة) من النظام, يعد مانح الامتياز موافقاً حكماً على تنازل صاحب الامتياز عن اتفاقية الامتياز وأعمال الامتياز إلى الغير أو تغير ا
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.