• The preamble includes the following:

  • A- The title of the document "Disclosure Document".

  • B- The text stating: "The Disclosure Document contains information that assists the potential franchisee in making a decision regarding the conclusion of the franchise agreement. It is important to read its provisions carefully, and additional inquiries related to the franchise opportunity can be directed to the franchisor, as well as to current franchisees, and to obtain specialized legal and financial advice before signing the agreement".

  • C- The name of the franchisor.

  • D- A description of the business that will be conducted under the franchise business model.

  • E- The date of preparation of the Disclosure Document.

Statement of the page number where each element of the Declaration document begins, in addition to including the franchise agreement template as an attachment.

• 1- Information about the franchisor as follows:

  • A- Trade name.

  • B- Address and contact details.

  • C- Trademark or trade name used in the franchise business model.

  • D- Date and place of establishment.

  • E- Owner of the franchisor.

• 2- Information about the members of the franchisor group, whose products or services will be used by the franchisee:

  • A- Trade name of each member.

  • B- Address of each member.

  • C- Relationship of each member to the franchisor.

  • D- Products or services that each member will provide.

• 3- If the franchisor has acquired franchise businesses in the last ten years:

  • A- The date on which the franchise business was acquired.

  • B- Name of the acquired entity.

• 1- Statement of the franchisor's experience over the last five years from an operational perspective, specifically:

  • A- Franchise operations subject to the potential agreement.

  • B- Other franchise operations.

• 2- A list of the current board members and senior executives of the franchisor responsible for franchise operations, including the following details:

  • A- Job title and employer over the last five years.

  • B- Experience related to franchise operations and working with the franchisor.
     

• 1- If the franchisor is a master franchisee, the following information about the master franchisor must be included:

  • A- Its trade name.

  • B- Its address and contact details.

  • C- Its relationship with the master franchisee.

• 2- A historical statement regarding franchise operations over the last five years.

• 3- A statement of the following information related to the agreement concluded between the franchisor and the master franchisee:

  • A- A statement of the geographical scope of the agreement and the rights and obligations of each party, and the right to grant a sub-franchise.

  • B- The expiration date of the agreement with clarification of its renewability or not.

  • C- Cases of agreement termination.

  • D- The extent to which the potential franchise agreement may be affected in the event of termination of the main franchise agreement.

• 1. Details related to any current lawsuit or arbitration against the franchisor or members of its group regarding their participation in the franchise business model, whether by an investigative authority, or under administrative, criminal, or civil procedures, or arbitration, under which allegations are made regarding any of the following:

  • A. Any breach of a franchise agreement or its termination, or non-renewal, without a legal reason or justification.

  • B. Fraud.

  • C. Violations of the provisions of the Competition Law in the Kingdom, or any competition laws outside the Kingdom.

  • D. Unlawful or fraudulent practices.

  • E. Violations of the provisions of the Franchise Law or its regulations in the Kingdom, or any franchise laws outside the Kingdom.

• 2. Details related to any judgment or decision issued - in any lawsuit or arbitration - against the franchisor or members of its group regarding their participation in the franchise business model, concerning any of the matters mentioned in paragraph (1) of this item in the last five years.

Statement whether the franchisor and any of the members of his group referred to in item (3) of these requirements in the last ten years:
A- Have had any preventive settlement or financial reorganization procedures initiated under the Bankruptcy Law in the Kingdom.
B- Have had any restructuring procedures initiated, including preventive settlement or financial reorganization under any bankruptcy laws outside the Kingdom.
C- Have been a party to any agreement with creditors for debt rescheduling or rearrangement.
 

• 1- If the grantor of the franchise requests the franchisee to pay an amount before concluding the franchise agreement, it must be stated whether this amount is refundable.

• 2- For each payment due from the franchisee to the grantor after the conclusion of the franchise agreement, it must be stated:

  • A- Description of the payment.

  • B- Amount.

  • C- Date of payment.
     

The estimated total costs that the franchisee will incur to start operating the franchise business, if known by the franchisor. Examples of these costs include those related to renting real estate, improvements, construction work, redesign, decorations, purchasing or leasing equipment, inventory, supplies, technology, insurance, employees, and the capital required to start the franchise business. In the event that the franchise business is only operated outside the Kingdom, the estimated costs in the operating country may be included.

1- Determine whether the franchise is exclusive or not.
2- Details regarding whether franchise activities have previously been conducted in the franchise area and were granted by the same franchisor within the last ten years, in addition to details of these activities and the reasons for ceasing their practice.