JEDDAH: Saudi Arabia has witnessed an 866 percent surge in franchise registrations over the past three years, reaching 1,788 by the end of the third quarter of 2024.
The Ministry of Commerce said in a statement that this marks a significant increase from just 185 in the fourth quarter of 2021.
The release added that the accommodation and food services sector, which includes tourism-related businesses, hotels, and restaurants, led registrations with 1,232 entries, followed by the wholesale and retail division with 689 and the transport and storage industry with 257 registrations.
The ministry highlighted that a single enrollment can encompass multiple activities.
Global franchises entered Saudi Arabia in 1970 and have greatly impacted the country’s economic and cultural landscape, according to the Small and Medium Enterprise General Authority, or Monsha’at.
The authority added that over 380 Saudi companies have franchises countrywide and are expanding into other GCC nations.
Monsha’at emphasized that to enhance its business environment, the Kingdom implemented several measures and procedures that empowered international companies to enter the Saudi market and increased investment opportunities for local entrepreneurs to attract the most prominent international services and brands.
This significant growth has been driven by the Franchise Law introduced in October 2019, and its implementing regulations issued a year later. The ordinance established a regulatory framework to strengthen the relationship between franchisors and franchisees, promoting transparency and clarity, thereby encouraging business activities across the Kingdom.
The commerce ministry pointed out that Riyadh topped the list of issued franchise registrations with 647 enrolments, followed by Makkah with 363 and Eastern Province with 225.
The ministry highlighted that the Franchise Center, under Monsha’at, is playing a pivotal role in promoting entrepreneurship by fostering a culture of franchising, providing services, and attracting local and foreign investment, as well as creating new job opportunities in line with the objectives of the Kingdom’s ambitious plan for 2030.
The franchise market in the Middle East and Africa is valued at $30 billion, with the Kingdom accounting for approximately 50 percent of that total, according to the organizers of the Saudi Franchise Expo, set to launch in January.
The sector has become one of the fastest-growing parts of Saudi Arabia’s non-oil economy, with an average annual increase of 27 percent.
