In a strategic move aimed at enhancing the business environment and supporting small and medium-sized enterprises (SMEs), the Saudi Cabinet approved a significant amendment to the Commercial Franchise Law. This amendment exempts certain franchisors from the requirement of prior operational experience, based on four specific criteria. This decision aligns with the goals of the Kingdom's Vision 2030, which seeks to diversify the economy and stimulate innovation and entrepreneurship.

Background to the decision and the importance of the franchise system

The franchise system in the Kingdom is a cornerstone for supporting the growth and expansion of local brands, as well as attracting international brands. Historically, Article 5, Paragraph 1 of the system stipulated a fundamental condition to protect investors and franchisees: “A franchise opportunity may not be offered or a franchise granted unless the franchise business has been operated according to the franchise business model for a period of no less than one year by two individuals or at least two different points of sale.” The purpose of this condition was to ensure that the business model had proven its success and replicability before being offered as an investment opportunity to others, thus reducing risks for new entrepreneurs.

The four criteria for exception and their expected impact

With the move towards a more resilient and dynamic economy, the Cabinet's decision introduced carefully considered exceptions that balance protection and stimulus. These criteria are:

• Belonging to promising sectors: Franchise businesses must fall within the sectors targeted by Vision 2030, such as tourism, entertainment, technology, or advanced industries. This criterion aims to accelerate the growth of these vital sectors and increase the number of companies operating within them.
• Providing a comprehensive business model: The franchisor is required to submit a clear and detailed business model, including operational manuals, market analysis, and a feasibility study demonstrating the project's viability. This criterion replaces the requirement for practical experience with rigorous planning and analytical requirements.
• Innovation and Economic Contribution: Franchise activity must be innovative, offering a product or service that effectively contributes to national economic development and meets local market needs. This requirement fosters the emergence of unique brands that fill market gaps and support local content.
• Linking the financial consideration to revenue: The fourth standard stipulates that the franchisor should not impose any financial consideration on the franchisee before operations commence and revenues are generated. The consideration should be linked to the actual financial performance of the project, as defined in the agreement. This measure reduces financial risk for the new investor and ensures the success of both parties.

The economic and future impact of the decision

This decision is expected to have a multifaceted positive impact. Locally, it will encourage entrepreneurs and innovators to transform their projects into scalable brands through the franchise model, leading to job creation and supporting the growth of small and medium-sized enterprises (SMEs). Regionally and internationally, this regulatory flexibility makes the Saudi market more attractive to emerging global brands that may not meet the pre-operational requirements but possess strong and innovative business models, thus enhancing the Kingdom's competitiveness as a leading investment destination.

In a strategic move aimed at regulating and developing the environmental services market in Saudi Arabia, the Ministry of Human Resources and Social Development, in cooperation with the National Center for Environmental Compliance, announced the launch of the “Athar” platform for freelancers. This platform, part of the Professional Accreditation Initiative, is the first regulatory framework of its kind enabling individuals to practice environmental freelance work in a certified and official manner, opening new horizons for Saudi specialists and supporting the national transformation towards a green economy.

National context and future vision

The launch of the “Athar” platform cannot be viewed as an isolated event, but rather as an integral part of the major transformations the Kingdom is undergoing within the framework of Vision 2030. The Vision seeks to diversify income sources and reduce dependence on oil, with a strong focus on environmental sustainability. Initiatives such as “Green Saudi Arabia” and “Green Middle East” are fundamental pillars of this direction, aiming to improve the quality of life and protect the environment for future generations. Hence, the “Athar” platform serves as an implementation tool that translates these aspirations into tangible reality by building a qualified national workforce capable of leading the environmental services sector.

Launch details and first phase

The platform's launch ceremony was attended by high-level officials, including the Deputy Minister of Human Resources and Social Development for Labor, Dr. Abdullah Abu Thnein, and the Deputy Minister of Environment, Water and Agriculture, Engineer Mansour Al-Mashiti, reflecting the importance the government places on this project. As a first step, 99 licenses were issued to accredited environmental practitioners who will begin their careers by providing environmental management plan (EMP) services for low-impact facilities, such as auto repair shops, in collaboration with the private sector.

Expected economic and social impact

The official spokesperson for the National Center for Environmental Compliance, Saad Al-Mutrafi, explained that the platform serves a vast market of over 50,000 establishments, making it a promising economic market. Opening this field to individuals will directly contribute to supporting localization efforts and creating quality job opportunities for citizens in a specialized and in-demand sector. It will also raise the overall level of environmental compliance in the Kingdom, as small and medium-sized enterprises (SMEs) will be able to access certified environmental services at competitive prices, thus enhancing their sustainability and reducing their environmental footprint.

A look to the future

The platform's development plans don't stop there, with the next phase scheduled for launch in the second quarter of this year. This phase will involve training a new cohort of environmental practitioners through specialized programs implemented in collaboration with several leading Saudi universities. These academic partnerships aim to ensure the quality of the outputs and provide the market with highly qualified professionals capable of delivering comprehensive consulting services across multiple environmental fields, extending beyond simply preparing plans to include periodic reports and environmental audits.