Terms and phrases used herein shall have the meanings assigned thereto in Article (1) of the Franchise Law, issued pursuant to Royal Decree No. (M/22) dated 09/02/1441H.

Subject to the provisions of Article (4) of the Law, the following agreements and arrangements shall not be deemed a franchise agreement:
a. Agreements or arrangements entered into between the Franchisor and the Franchisee regarding the implementation of the Franchise agreement, including:
1. any agreement or arrangement between a landlord and a tenant, or a tenant and a sub-tenant;
2. any agreement or arrangement between partners or shareholder;
3. any agreement or arrangement between lenders and borrowers;
4. any agreement or arrangement between an employer and an employee concerning work relationship;
b. Agreements or arrangements whereby a non-profit entity purchases goods or offers services for its members, or assists them purchase goods or access services; and
c. A license or permit granted by a government entity.

1. The franchisor shall register the signed franchise agreement and the related disclosure document with the Ministry within (90) days from the date of signing the agreement, and deposit a copy of the franchise agreement and disclosure document with the competent authority at the Ministry.
2. In case of any amendment to the franchise agreement such as changing the parties or the term thereof, the franchisor shall register the amendment by depositing a copy of the signed amendment with the Ministry within (90) days from the date on which the amendment is made.

1. Registration fee for the franchise agreement and its disclosure document is (500) Riyals.
2. Amendments fee for the franchise agreement is (100) Riyals.

Registration of the franchise agreement and its disclosure document shall be valid throughout the term of the agreement, however, the franchisor shall revoke the registration by submitting a request within (90) days of the occurrence of any of the following:
a) The agreement is terminated or expires.
b) The agreement is nullified or terminated by a court’s order.

1. The disclosure document shall include the items and information specified in the disclosure document requirements attached to these Regulations, and shall be accompanied by the franchise agreement form.
In case an item or information set out in the document does not apply to the franchise business or the franchisor, the phrase “Not applicable” shall be stated.
2. If a material change is made to the disclosure document after delivering the same to the franchisee and before entering into the franchise agreement, the franchisor shall provide a new disclosure document or a separate document indicating the material change as soon as possible, prior to signing the franchise agreement or paying any consideration in relation to the franchise by the Franchisee, whichever occurs first. A material change means any change in facts or circumstances that have a material impact on the value of the franchising business or the franchisor's decision to enter into the franchise agreement.

If the franchisor provides the franchisee with information in the disclosure document regarding the historical or projected financial performance of franchises owned by the franchisor or any of its associates, or the projected financial performance of the Franchisee, it shall include:
a. the material assumptions underlying the preparation and presentation of such information;
b. whether the information is based on actual results of existing retail outlets;
c. whether the information relates to franchisor-owned or franchisee-owned outlets; and
d. the following warning: "income may vary between franchises, and any historical or projected information is general in nature. Each Franchisee should take into account its own circumstances and the geographical scope in which the franchise business is located".