Franchising in Iran: Challenges and Opportunities in Contract Law

Franchising represents a strategic approach to business expansion that allows entrepreneurs with moderate capital to participate in established markets, often yielding favorable returns with lower risk. This article offers an in-depth analysis of the franchise concept, its historical evolution, and the essential elements constituting franchise agreements. It further explores the roles of key stakeholders, including franchisors, franchisees, and regulatory bodies, while underscoring the importance of legal documentation such as the Franchisor Disclosure Document (FDD) and the Franchise Agreement. In light of the lack of a clear legal framework for franchising in Iran, the article categorizes franchise agreements as unique contracts under Iranian law, differentiating them from agency and lease agreements. The conclusion presents recommendations for enhancing the franchising landscape in Iran, advocating for comprehensive legislation and financial support mechanisms to foster sustainable growth in the sector.