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Franchising in Aqaba, Hashemite Kingdom of Jordan, is governed primarily by general commercial, contract, intellectual property, competition, company and employment laws of Jordan, together with the special regulatory framework that applies inside the Aqaba Special Economic Zone. Aqaba offers targeted incentives and a business-friendly environment through the Aqaba Special Economic Zone Authority - ASEZA - which affects licensing, taxation and certain approvals for foreign investors. There is no single comprehensive franchise statute in Jordan, so franchise relationships are structured and enforced through individual contracts and by relying on protections available under trademark, trade secret and unfair competition law.
Franchising transactions involve multiple legal and commercial risks. You may need a lawyer when:
- Negotiating or drafting a franchise agreement, master franchise agreement or area development agreement to ensure terms on fees, royalties, territory, performance obligations, termination, and post-termination rights are clear and enforceable.
- Protecting intellectual property such as trademarks, trade dress, manuals and know-how with registrations and confidentiality arrangements.
- Complying with ASEZA rules, licensing requirements, and local permits for operations inside Aqaba Special Economic Zone.
- Structuring the local business entity and navigating foreign investment rules and approvals.
- Drafting and reviewing lease agreements, supplier contracts and distribution arrangements for franchise locations.
- Handling employment matters including employment contracts, social security registration and compliance with local labor law.
- Performing due diligence for buying into an existing franchise or granting a master franchise or sub-franchise rights.
- Handling disputes, including mediation, arbitration or court proceedings, and enforcing contractual rights or judgments.
- Advising on tax consequences, incentives and structuring to obtain ASEZA benefits while ensuring compliance with national tax and VAT obligations.
Key legal and regulatory aspects to consider when franchising in Aqaba include:
- Contract law: Franchise relationships are primarily contractual. Carefully drafted agreements determine obligations, termination rights, remedies, and governing law.
- Company and investment law: Establishing a local presence typically requires forming a Jordanian company or branch and complying with company registration and any foreign investment approvals. ASEZA may offer streamlined procedures and incentives but also requires compliance with zone-specific rules.
- Intellectual property: Trademark registration and protection of trade names, logos and trade dress is essential. Trade secrets and know-how should be protected by confidentiality agreements, restricted access measures and employment clauses.
- Licensing and permits: Retail, food and beverage, hospitality and other regulated activities need municipal and ASEZA licences. Health, safety and food handling rules apply for F&B franchises.
- Employment law: Employment contracts, working hours, termination procedures and social security contributions are governed by Jordanian labor law. Localization and work permit rules apply for foreign staff.
- Tax and incentives: ASEZA provides incentives and exemptions for businesses in Aqaba subject to conditions. National corporate tax, VAT and customs rules can apply depending on structure and activities.
- Competition law: Antitrust rules prohibit anti-competitive practices such as price-fixing and certain exclusive dealing practices that may unduly restrict competition.
- Dispute resolution: Parties may choose governing law and dispute resolution mechanisms. Arbitration is commonly used in commercial transactions, while Jordanian courts also hear commercial disputes. Enforcement issues can arise with foreign judgments and awards, so the dispute clause should be carefully drafted.
Yes. Franchising is permitted and commonly used in Aqaba. Franchise relationships are governed by general Jordanian law and ASEZA rules inside the Aqaba Special Economic Zone. You will need to comply with licensing, company registration and sector-specific regulations.
There is no mandatory national franchise registration regime in Jordan. However, registering trademarks, local companies and required business licences is necessary. When operating in Aqaba, you must comply with ASEZA registration and licensing requirements.
Protect trademarks by filing for registration with the relevant Jordanian authority. Protect know-how and manuals with strong confidentiality clauses, non-compete and non-solicit provisions where enforceable, and robust employment agreements. Consider physical and IT security measures to limit access to sensitive information.
A foreign franchisor can operate in Aqaba either through a local company, a branch, or by appointing a local master franchisee or sub-franchisees. ASEZA and national investment rules may require certain approvals and affect tax treatment, so structure should be planned with local counsel.
Aqaba Special Economic Zone offers a range of incentives to encourage investment, which can include tax and customs benefits, simplified procedures and land-use advantages. Eligibility depends on the activity, investment size and compliance with ASEZA conditions. Seek specialist advice to confirm available incentives for your project.
Key clauses include grant of rights and territory, fees and payment terms, operational standards, training and support, intellectual property use, confidentiality, advertising and brand standards, performance requirements, reporting, audit rights, term and renewal, termination and post-termination obligations, dispute resolution and governing law.
Parties often agree to arbitration or international commercial arbitration for speed and enforceability, but Jordanian courts remain an option. The choice of governing law, venue and enforcement mechanism should be negotiated and clearly stated in the agreement.
Employment contracts, local hiring requirements, work permits for foreign employees, social security contributions, wages and termination rules are regulated. Franchisees operating stores should ensure staff policies comply with Jordanian labor law and ASEZA rules where applicable.
Certain restrictions may be lawful, such as recommended retail prices and approved supplier lists, but hard price-fixing and anti-competitive exclusive supply practices can raise competition law issues. Clauses must be drafted to achieve brand control without breaching competition rules.
Timeframes vary depending on the complexity of the deal, company formation, licensing, site selection and approvals from ASEZA. A simple partnership with an established local operator may be faster than establishing multiple company-owned outlets. Plan for several weeks to several months to complete registrations and obtain permits.
Useful organizations and resources to consult include:
- Aqaba Special Economic Zone Authority - ASEZA for information on zone regulations, incentives and permits.
- Ministry of Industry, Trade and Supply for commercial registration and trade matters.
- Jordan Investment Commission for foreign investment guidance and incentives.
- Intellectual property office or directorate within the relevant ministry for trademark and IP registration and enforcement.
- Jordan Chamber of Commerce and Aqaba Chamber of Commerce for local business contacts and practical guidance.
- Jordanian Bar Association to find licensed local lawyers experienced in franchising and commercial law.
- Local accounting and tax advisers for tax, VAT and customs advice relevant to operations in Aqaba.
- Industry associations and international franchising bodies for best practice, model agreements and market intelligence.
If you need legal assistance with franchising in Aqaba, consider the following steps:
- Prepare basic information before contacting counsel: business model, proposed territory, expected number of outlets, investment budget, desired timeline and whether you will use a master franchise, area developer or direct ownership model.
- Arrange an initial consultation with a lawyer experienced in franchising and ASEZA matters to identify key legal risks, licensing requirements and likely timelines.
- Conduct legal due diligence on local partners, leases, permits, existing IP registrations and any regulatory history in Aqaba.
- Instruct counsel to draft or review franchise documents, confidentiality agreements and supplier contracts, and to advise on IP registration and protection strategies.
- Negotiate core commercial terms and include clear dispute resolution and governing law provisions adapted to enforceability concerns.
- Complete company formation, obtain ASEZA and municipal licences, register trademarks as needed and implement employment and operational compliance measures before opening.
- Maintain ongoing legal support for compliance monitoring, renewals, audits and handling any disputes that arise.
Working with a specialist local lawyer will help you navigate ASEZA requirements, protect your brand and reduce commercial and regulatory risk when franchising in Aqaba, Hashemite Kingdom of Jordan.
