Can I terminate a franchise in Saudi Arabia if the franchisor fails to provide training and support?

I would have to read the Master Franchise Agreement ("MFA"), your specific franchise agreement ("fa"), and the record of correspondence and other actions that have (or haven't yet) taken place to be able to advise as to whether the fracnhisor is in breach (or if you have breached either the MFA or fa) and your current options vis a vis the franchisor.

Jason Huf

Yes, if it is proven that the franchisor has failed to provide the agreed training and support, you can legally terminate without penalties and claim compensation, provided that a proper notice is given and a processing period is granted before termination.

In the Kingdom of Saudi Arabia, franchise agreements are governed by the Franchise Law and its implementing regulations. If the franchisor fails to provide the agreed-upon training, operational manuals, or ongoing support, this may constitute a material breach of contract, entitling you to terminate the agreement and claim compensation.

1. Determining the Breach:
Review the franchise agreement and disclosure document to identify specific obligations (training, operational manuals, technical/marketing support). Failure to fulfill these obligations, or inadequate fulfillment, constitutes a breach of contract if it is material and impacts operations.

2. Legal Notice Before Termination:
A formal written notice must be sent to the franchisor, including:
A detailed statement of the breaches
A request for corrective action within a reasonable timeframe (typically 14–30 days)
A warning that failure to rectify the breach will result in termination and a claim for compensation
(This notice is crucial for demonstrating good faith and establishing your right to terminate the agreement.)

3. Termination without Penalties:
If the breach continues after the grace period, you can terminate the contract based on the fundamental breach, thus disqualifying any penalty clause or early termination penalty, as penalties are not applicable when the other party is at fault.

4. Possible Compensation:
You are entitled to claim:
A full or partial refund of the franchise fees paid
Set-up and operating costs associated with the brand
Direct losses resulting from the lack of training/support
Provided you can prove causation and provide documentation (invoices, correspondence, operational reports).

5. Practical Procedure:
Send a formal notice of breach and address the issue
Document all shortcomings
Then terminate the contract if the breaches are not rectified
File a lawsuit in the Commercial Court to claim termination and compensation