Bangladesh Franchising Sector

HSBC estimates that Bangladesh will be the ninth largest consumer market by 2030, surpassing UK and Germany with a population of 54 million and a daily income of more than $20 (2011 PPP). Bangladesh’s potential lies in its highly dynamic domestic consumer market, contributing nearly 70% to GDP and experiencing rapid growth fueled by an expanding middle and affluent class. By 2030, this prosperous consumer group could include over 34 million Bangladeshis, constituting around 15% of the population.

According to the World Bank, the service sector contributed 51% of Bangladesh’s GDP in 2022. The GDP per capita was  $2637.34 in end of fiscal year 2023 according to FitchConnect. The service sector will continue to grow as the middle-class flourishes and seeks  outlets for spending. According to a survey of the Bangladesh Bureau of Statistics, there were 430,000 hotels and restaurants in the market in 2021, generating over 2 million employment opportunities. Pizza Hut, KFC, Dominos Pizza, Pizza Inn, BB.Q Chicken, Tony Roma’s, and Burger King are already present in the market. Restauranteurs are projecting to double their business by 2028 as the government has recently identified the franchise sector as an industry. The food & beverage sector already occupies the lion’s share of the service industry. Its share will grow as dining out remains the most popular social activity, with growing demand for online food delivery.

In Bangladesh, there is no specific law governing franchising. The Bangladesh government’s halal certification policy requires businesses that import, export, or make goods that are marketed as halal to obtain certification and use the associated logo. The policy was issued by the Bangladesh Islamic Foundation (BIF), which is a body under the Ministry of Religious Affairs. Franchise businesses are established through contractual relationships between the franchisor and the franchisee. These contracts are based on the Contract Act of 1872, which outlines the legal principles governing contracts in Bangladesh. The franchisor can assign their trademark and goodwill to the franchisee under the provisions of Chapter 5 of the Trademarks Act, 2009. Non-disclosure agreements (NDAs) are often used to protect intellectual property. However, NDAs are not always effective. This is because NDAs only provide remedies after a breach has occurred. They do not prevent a breach from happening in the first place. To protect intellectual property, franchise agreements should contain comprehensive clauses that define what information is considered confidential, and what steps franchisees must take to protect it. Franchise agreements should also include provisions that allow the franchisor to audit franchisees’ premises and records.

Commercial real estate rent prices can be very high in certain central locations and franchises may find difficulty in finding suitable locations to open more outlets. The Hazrat Shahjalal International Airport’s new Terminal 3 is set to start operations by early/mid 2025 and may present modern locations for U.S. franchises to open an outlet in Bangladesh. Additional shopping mall retails spaces may present other options. Existing malls, food courts and transportation hubs can also be utilized but may require upgrading to meet U.S. franchise standards.

Franchises face some challenges at the port and in customs as well as sourcing quality ingredients, and raw materials in Bangladesh. Some franchises opt to sourcing from neighboring India. Others have setup their own cold chain supply to transport and store goods in a temperature-controlled environment.

Another challenge for U.S. firms doing business in Bangladesh that impacts the franchise sector is the difficulty of repatriating revenue. The Bangladesh Central Bank tightly regulates payments made from Bangladesh taka into foreign currencies. This includes payments made by franchisees to overseas franchisors for royalties and technical fees. Franchisees may need to obtain approval from the authorities before making these payments, which can slow down repatriation of profit and revenue. However, new investor groups are starting to show interest starting their first franchising chains. Despite the relative lack of experience of these groups, they may be suitable option to for U.S. franchises hoping to enter the Bangladesh market. As with all U.S. companies entering the market, it is recommended that all franchises planning to enter Bangladesh market do their due diligence and work with the Commercial Service office at the U.S. Embassy in Dhaka.

Connect with your local U.S. Export Assistance Center in the United States to schedule an appointment for a consultation.

For more information visit the U.S. Commercial Service in Bangladesh on-line at  or reach out to Mashur Seth, Commercial Specialist, CS Dhaka.