Article 7 of the Saudi Franchise Law
المادة 7 من نظام الامتياز التجاري · الفصل الرابع: القيد والإفصاح
The franchisor must give the franchisee the disclosure document at least 14 days before the agreement or any payment, in Arabic, clear and accurate, including any financial performance information it provides.
Official text (Arabic)
This article has not been amended since the law was issued.
1- على مانح الامتياز تزويد صاحب الامتياز بنسخة من وثيقة الإفصاح وفقاً لما تحدده اللائحة قبل (أربعة عشر) يوماً على الأقل من إبرام اتفاقية الامتياز أو من تاريخ دفع صاحب الامتياز أي مقابل في شأن الامتياز، أيهما أسبق.
2- يجب أن يراعى في وثيقة الإفصاح ما يأتي:
أ- أن تحرر باللغة العربية، وإذا كانت محررة بغير اللغة العربية فتجب ترجمتها إلى اللغة العربية ترجمة معتمدة.
ب- أن تكون واضحة ودقيقة.
3- في حال تقديم مانح الامتياز إلى صاحب الامتياز -الذي ينوي التعاقد معه- معلومات تتعلق بالأداء المالي السابق أو المتوقع لأعمال الامتياز المملوكة له أو لأي شخص ضمن مجموعته؛ فعليه تضمين هذه المعلومات في وثيقة الإفصاح ومراعاة استيفائها للأحكام والشروط التي تحددها اللائحة.
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 7 explained in plain English
This article regulates the timing, form and financial content of the disclosure document, to protect anyone intending to buy a franchise.
1- Delivery date: The franchisor must provide the franchisee with a copy of the disclosure document, as the Implementing Regulations specify, at least 14 days before whichever of two dates is earlier:
- the date the franchise agreement is concluded; or
- the date the franchisee pays any consideration relating to the franchise.
So if he is asked to pay a sum before signing, the period is counted from the date of payment.
2- Form of the document: It must be in Arabic; if it was drawn up in another language it must be translated by an approved translation into Arabic, and it must be clear and accurate.
3- Financial performance information: If the franchisor provides the person he intends to contract with with information on the past or expected financial performance of franchise businesses owned by him or by any person within his group, he must include it in the disclosure document, and it must meet the provisions and conditions the Implementing Regulations specify.
This article is linked to Article 6, which requires the franchise agreement and the disclosure document to be registered with the Ministry. The document is therefore not merely a marketing brochure but a legal document. Anyone who doubts that these requirements have been met can consult a lawyer who specializes in commercial cases.
Practical example
A cafe franchise company offered Fahd the chance to sign within three days and pay an upfront fee. Under this article, Fahd must receive the disclosure document at least 14 days before signing or paying any sum, whichever is earlier, so he asked for the document first and paid nothing before the period had passed.
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 7 of the Saudi Franchise Law
When must I receive the disclosure document before buying a franchise?
At least 14 days before the franchise agreement is concluded or any consideration relating to the franchise is paid, whichever is earlier.
Can the disclosure document be in English only?
No. It must be in Arabic, and if it is in another language it must be translated into Arabic by an approved translation.
If the franchisor gave me expected profit figures, must they be in the disclosure document?
Yes. If he provides information on past or expected financial performance, he must include it in the disclosure document and meet the conditions the Implementing Regulations specify.
More articles on Registering the Franchise Agreement and Disclosure Document
- Article 6
The article requires the franchise agreement and the disclosure document to be registered with the Ministry of Commerce, and leaves the registration procedures, documents and information to the Implementing Regulations.
تقيَّد اتفاقية الامتياز ووثيقة الإفصاح لدى الوزارة، وتحدد اللائحة الإجراءات المنظمة للقيد والوثائق والمعلومات الواجب تقديمها.
- Article 12
The article refers to the Implementing Regulations the provisions on advertising and marketing activities connected with the franchise.
تحدد اللائحة الأحكام المتصلة بأنشطة الدعاية والتسويق المتعلقة بالامتياز.
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.