The concept of a franchise arrangement is not recognised under a separate law in Qatar. There is no legal definition or specific law governing franchising. There are no legal requirements or compliance procedures imposed on the franchisor prior to offering franchises in Qatar. There are no disclosure requirements under Qatari Law for franchisors. There is no specific government agency which regulates the offer and sale of a franchise.

All agreements, including franchise agreements, are governed by the Civil Code Law No. 22 of 2004 ("Civil Code"). In general terms, the Civil Code recognize the right of parties to contract with each other on such terms as they may agree. Certain aspects of a franchise agreement are also governed by the UAE intellectual property laws (including, Law No. 9 of 2002 on Trademarks, Trade Names, Geographical Indications and Industrial Designs (2002), Law No. 5 of the year 2005 on Protection of Secrets of Trade (2005), Commercial Law No. 27 of 2006, Law No. 8 of 2008 on Consumer Protection) as in most cases the main elements of franchise agreement involve the transfer know how and intellectual property rights such as trademarks, logos, business processes, etc.

While there are no disclosure laws, franchisors need to be mindful of information provided to franchisees as pursuant to the Civil Code, as a franchisee may be able to nullify the contract based on misrepresentation. Misrepresentation occurs when one of the parties "deceives the other by means of fraud, by word or deed, which leads the other to consent to what he would not otherwise have consented to". Omission may also constitute misrepresentation where it is deliberate. It does not include statements made innocently or negligently.

The concept of "good faith" is further applicable pursuant to the Qatari Civil Code. It is, in effect, a requirement not to use the terms of a contract to abuse the rights of the other contracting party, not to cause unjustified damage to that other party and to act reasonably and moderately. It is implied into contracts (pursuant to the Civil Code) that "a contract must be performed in accordance with its contents, and in a manner consistent with the requirements of good faith".

Unlike the other GCC jurisdictions, a franchise does not fall under Commercial Agents Law No. 8 of 2002 (the “Agency Law”). In order to be treated as a Commercial Agent under the Commercial Agents Law, the following conditions must be met:-

The Agent must be a Qatari National or a company wholly owned by Qatari Nationals,
Exclusivity;
License to distribute/sell goods or services
Acting on behalf of a principal
Consideration in the form of profit or commission

If the conditions set out above do not apply then the agency arrangement is not registrable and does not fall within the ambit of the Commercial Agents Law, but will be governed by provisions of the Commercial Code.

In a franchise relationship the franchisee does not ‘act on behalf of the principal (franchisor”), nor is there consideration paid to the franchisee in the form of profit or commission. Therefore, a franchisee cannot be afforded the protections under the Agency Law.