Based on the principle of participation and transparency, the Ministry of Commerce and Investment calls on those interested and the public to express their views and opinions about the proposal of the Executive Regulations relevant to the Franchise System, through the following e-mail (Franchise@mci.gov.sa), deadline: 26.06.1441 AH, corresponding to 20.02.2020 AD.
MCI has explained that the aforementioned regulation aims to encourage the franchise activities in the Kingdom, and to lay the foundations for this kind of activity, based on the principle of transparency, in addition to ensuring the disclosure of rights, duties and risks related to franchise opportunities, so that to assist the franchisor of making sound investment decisions.
Among the most prominent features of the said Executive Regulations are organizing the procedures and requirements for the relevant registration and disclosure at the Ministry, also issuing a model for the disclosure document, also specifying the content of the document submitted by the franchisors, besides organizing the period of registration with the Ministry and the cancellation cases, as well as organizing the mechanism for financing the advertisement and marketing activities.
The aforementioned regulation has clarified the provisions for determining the owner of the trademark, used in the franchise business, also the relationship of the franchisor to this trademark, in case it is not owned by him, in addition to any restrictions imposed on both agreement parties regarding practicing any business that may compete the franchise works during the validity of the agreement or after it has been terminated or expired.
The aforementioned proposal and its executive regulations have attached great importance for providing the necessary protection to the franchisor, especially when the franchise agreement ends, such as the necessity to include the rights of both the franchisor and franchisee and their obligations in the event of termination or expiration of the franchise agreement.
MCI calls on those interested and the public to participate and express their opinions on the said proposal, using the form designated for that. The said proposal and the relevant form for expressing the opinions can be found through click here