Now that many international franchises have entered the Indian market, it is natural for them to look across the border to Pakistan. There are opportunities for franchisors in Pakistan subject to cultural adaptation and compliance with Islamic custom. For example, alcohol cannot be served and only halal meet can be used in cooking.

As is the case in most countries of the Indian sub-continent, there are restrictions on obtaining payments in foreign exchange.

All payments in foreign exchange have to be made from an authorised bank and the consent of the State Bank of Pakistan is required if the transaction exceeds

·         US $ 100,000 initial fee irrespective of the number of outlets

·         5% royalty

·         Initial term is more than five years

The Government of Pakistan is also re-drafting the intellectual property legislation in respect of trademarks, patents and copyright to combat widespread infringement and piracy.

Given the many uncertainties in this market, franchising is more attractive than direct investment as the main risk is taken by the local franchisee.