As a key commercial hub in the Middle East region, and benefitting from continued economic growth, population expansion, and as a tourist destination for visitors from around the world, franchising is a key feature of the UAE commercial landscape, for both local and international brands.
This is particularly the case for food & beverage (F&B) brands. According to Mordor Intelligence, the F&B sector in the UAE was worth approximately USD 19.98 billion in 2024 and projected to reach USD 43.98 billion by 2029.
These factors provide some important ‘take-aways’ for F&B brands considering an expansion into the UAE, whether through direct operator or franchised models.
Food and beverage (F&B) is the dominant franchising sector, primarily due to the level of tourism and also the diverse population.
According to the UAE Ministry of Foreign Affairs, more than 200 nationalities live and work in the UAE. This has led to significant appeal in the UAE market for F&B brands from all over the world, and where the UAE is often the ‘stepping stone’ to expansion in the rest of the GCC and MENA region due to the number of visitors to the UAE from other countries in the region.
A prominent and popular F&B brand originating from the Philippines is Jollibee, which currently has with more than 1700 stores across the world, including across the Middle East. Leveraging the existing reputation amongst expats from the Philippines and South East Asia, who were familiar with the Jollibee from ‘back home’, there are now more than 20 locations in the UAE. The announcement in November 2024 that Jollibee will be taking full ownership of set to gain full ownership of Tim Ho Wan, the Hong Kong dim sum restaurant chain, illustrates the diversification model followed by many F&B brands (Jollibee also acquired a 70% stake in Compose Coffee, the South Korean coffee brand, earlier in 2024).
A number of ‘home grown’ UAE F&B brands are applying the same model and either acquiring or developing parallel and complimentary brands to their core QSR service offering, and then rolling these out through direct operator, or franchise models, or both. Our Commercial Team, led by Victoria Woods and Corporate Team, led by Ahmad Sergieh has extensive experience in franchise agreements and corporate structuring respectively for F&B brands operating in the UAE.
So, what are the ‘take-aways’ for an F&B brand from an IP perspective?
- Ensuring that a sufficient scope of protection is in place through registration of the brand’s trade marks in the current and future markets of interest in the region. This ensures control and ownership of the brand’s trade marks, particularly when entering franchising agreements.
- This strategy also minimises the risk of a third party, seeing the launch of the F&B brand in the UAE, from then registering an identical or imitation mark in a nearby country and seeking to unfairly leverage the goodwill and reputation being developed, often at significant cost and effort, by the brand owner. These ‘rogue third parties’ will often offer a competing but sub-standard brand offering, or alternatively, hold the brand owner to ransom, either by way of a punitive trade mark licence agreement or an excessive sale price for the transfer of the unauthorised trade mark registration.
- A failure to deploy a suitable trade mark strategy can result in an F&B brand owner suffering adverse effects of brand confusion (complicated by the borderless nature of social media); potential negative goodwill in the market, and diminished appeal to potential franchisees (particularly if the service and/or quality levels of the rogue third party are poor).
- As a ‘worse case scenario’, a rogue third party registration may ‘lock out’ the F&B brand owner from operating, either directly or through a franchise, in that third party country until such time as the F&B brand owner succeeds in costly court proceedings.