The Council of Ministers,
after perusal in its session held under the chairmanship of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud, of Royal Court File 45264 dated 22 Jumada Al-Thani 1446 [23 December 2024], which includes the Minister of Commerce Telegram 20257 dated 18 Jumada Al-Thani 1446 [19 December 2024], regarding the review of the provisions of article 5 of the Franchise Law issued by Royal Decree D/22 dated 9 Safar 1441 [8 October 2019],
after perusal of the Franchise Law issued by Royal Decree D/22 dated 9 Safar 1441 [8 October 2019],
after perusal of clause Third of Royal Decree D/22 dated 9 Safar 1441 [8 October 2019],
after perusal of Bureau of Experts at the Council of Ministers Memo 1174 dated 6 Rabi Al-Thani 1446 [9 October 2024], Memo 3014 dated 4 Ramadan 1446 [4 March 2025], Memo 4098 dated 21 Dhu Al-Hijja 1446 [17 June 2025], Memo 850 dated 26 Safar 1447 [20 September 2025], and Memo 1854 dated 20 Jumada Al-Awwal 1447 [11 November 2025],
after perusal of Council of Economic and Development Affairs Recommendation 9-4/47/R dated 3 Rabi Al-Thani 1447 [25 September 2025],
and after perusal of General Committee of the Council of Ministers Recommendation 6296 dated 9 Jumada Al-Thani 1447 [30 November 2025],
hereby decides
First
The non-application of the requirement provided in article 5(1) of the Franchise Law—issued by Royal Decree D/22 dated 9 Safar 1441 [8 October 2019]—is hereby approved in regard to certain categories of franchisors and franchisees, in accordance with the following:
| Criteria | Criteria Details |
| 1․ The franchise business must be in a promising sector in the Kingdom and the goal is to increase the number of practitioners in it. | If the franchise is within a targeted sector in Vision 2030 or its programs, and the goal is to expand the number of practitioners in it. |
| 2․ The franchisor must provide a clear and detailed franchise business model. | It contains detailed instructions and market analysis, and is a practical guide with a feasibility study that guarantees success. |
| 3․ That the franchise business activity is innovative, or a product or a service that contributes to the development of the national economy or meets the needs of the local market. | Innovation, economic impact, or response to market need is considered when evaluating demand. |
| 4․ That the franchisor does not require the franchisee to pay for the franchise before practicing the franchise business, and the fee must be after the franchisee achieves revenues from practicing the franchise business as determined by the franchise agreement. | To reduce operational risk to the franchisee and link the consideration to the realisation of actual revenue. |
Second
The application of the criteria—referred to in clause First of this decision—must be through a committee formed under the chairmanship of the Ministry of Commerce, and the membership of the Ministry of Investment and the Ministry of Economy and Planning.
Salman bin Abdulaziz Al-Saud
Issued on: 24 Rajab 1447
Corresponding to: 13 January 2026
Published in Umm Al-Qura 5142 issued on 30 January 2026.