Article 24 of the Saudi Franchise Law
المادة 24 من نظام الامتياز التجاري · الفصل الحادي عشر: أحكام ختامية
The article punishes violation of the Law or Regulations with a fine of up to SAR 500,000 imposed by a committee, with an appeal to the Board of Grievances and possible publication of the decision.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يعاقب من يخالف أيَّ حكم من أحكام النظام أو اللائحة بغرامة لا تزيد على خمسمائة ألف ريال.
2- تنشأ بقرار من الوزير لجنة من ثلاثة أعضاء يكون أحدهم على الأقل متخصصاً في الأنظمة التجارية؛ للنظر في مخالفات أحكام النظام واللائحة وإيقاع العقوبة المنصوص عليها في الفقرة (1) من هذه المادة.
3- تصدر قواعد عمل اللجنة، وتحدد مكافآت رئيسها وأعضائها وأمانتها بقرار من الوزير.
4- دون الإخلال بأحكام الأنظمة ذات العلاقة، يجوز لمن صدر في حقه قرار العقوبة التظلم منه أمام ديوان المظالم.
5- يجوز أن يضمَّن قرار العقوبة النص على نشر ملخصه على نفقة المخالف في واحدة -أو أكثر- من الصحف المحلية الصادرة في مقر إقامته أو مقره الرئيس، ويجوز أن يضمن القرار كذلك النص على نشر ملخصه في الموقع الإلكتروني للوزارة أو أي وسيلة أخرى تحددها الوزارة، على أن يكون النشر -في كل الأحوال- بعد تحصن القرار بمضي المدة المحددة نظاماً أو بتأييده من ديوان المظالم.
6- لا يخل تطبيق العقوبة المنصوص عليها في الفقرة (1) من هذه المادة بحق الرجوع بالتعويض على المتسبب بالضرر نتيجة مخالفة أحكام النظام.
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 24 explained in plain English
This article sets out the penalty for violating the Franchise Law or its Regulations, the body that imposes it, and the route of objection.
1- The penalty: Anyone who violates any provision of the Law or the Regulations is punished with a fine of no more than SAR 500,000.
2- The committee: A committee of three members, at least one of whom is a specialist in commercial law, is established by decision of the Minister to review violations and impose the fine.
3- Organization of the committee: Its working rules are issued, and the remuneration of its chair, members and secretariat is set, by decision of the Minister.
4- Appeal: Without prejudice to the relevant laws, anyone against whom a penalty decision is issued may appeal it before the Board of Grievances. The article does not set the period for appeal.
5- Publication: The penalty decision may include publication of a summary of it at the violator's expense in one or more local newspapers at his place of residence or main office, and also on the Ministry's website or any other means the Ministry specifies. In all cases, publication takes place only after the decision becomes final through the passing of the legally set period or its confirmation by the Board of Grievances.
6- Compensation: Imposing the fine does not prevent the injured party from claiming compensation from whoever caused the damage by violating the Law.
It is preceded by Article 23, which voids the franchisee's waiver of his legal rights, and followed by Article 25, which allows settling disputes by arbitration, mediation and conciliation. Anyone against whom a penalty decision has been issued is best advised to consult a lawyer who specializes in administrative or commercial cases.
Practical example
A company in Jeddah offered franchise opportunities without meeting the requirements of the Law, so it was referred to the violations committee, which imposed a fine on it and decided to publish a summary of the decision. The company may appeal the decision before the Board of Grievances, and the summary is published only after the decision becomes final or is confirmed by the Board.
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 24 of the Saudi Franchise Law
How much is the fine for violating the Franchise Law?
A fine of no more than SAR 500,000 for anyone who violates any provision of the Law or the Regulations.
Who imposes the penalty for violating the Franchise Law?
A committee of three members established by decision of the Minister, at least one of whom is a specialist in commercial law.
Can I object to the penalty decision?
Yes. Anyone against whom a penalty decision is issued may appeal it before the Board of Grievances, without prejudice to the relevant laws.
Does paying the fine prevent a claim for compensation?
No. Applying the fine does not affect the right to claim compensation from whoever caused the damage by violating the provisions of the Law.
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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.