How To Protect My Franchise Brand
Without Your Brand - What Do You Have?
Think about IP rights in your franchise business plan.
Successful franchisors devote much time and energy in developing a franchise business plan that covers target markets, preferred suppliers, opportunities for growth, financial targets, etc. That plan should also address the protection and enhancement of the brand and other intellectual property (IP) rights that add value to the franchise network. There are 2 main steps to this process.
Step 1 - Develop an IP strategy.
An important part of the business plan is the IP strategy, which should cover these issues.
1. IP identification:
Implement a system that facilitates the identification of IP that is important to the franchise system and its future expansion. This may be achieved by conducting periodic IP audits to review the business systems and activities of the franchise network, and to identify IP created, owned and used by the franchisor.
2. IP protection:
Following each audit, take steps to protect franchisor IP by formal registration and/or strengthening procedures governing the use of IP. The franchisor can then decide how to use and profit from its IP, and manage threats.
3. Expansion of the brand:
Conduct due diligence investigations before expanding a franchise network, whether domestically or abroad. Those investigations help to identify impediments to the use of the network brand or IP in the target market.
4. Managing threats and enforcement of rights:
Implement processes to prevent or manage threats from third parties, such as by:
- ensuring the network brand is distinctive;
- making sure the franchisor owns or is entitled to use network IP;
- telling the market that the franchisor owns its IP (eg: with trade marks use ™ or ® (as applicable), and with copyright material use ©);
- keeping watch on competitors;
- monitoring franchisee use of network IP.
These processes will put the franchisor in a stronger legal position to enforce its rights as the owner or authorised user of the IP.
Step 2 - Ensure franchise network compliance:
The entire franchise network should understand and play a role in the identification and protection of valuable IP. Suggested procedures include:
- accurately identifying franchisor IP in disclosure documents and franchise agreements;
- drafting contractual provisions in franchise agreements which regulate IP use by franchisees;
- developing an IP policy for franchisees to comply with; and
- giving franchisor and franchisee personnel IP training.
For further information or assistance:
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The information in this article is general, and does not constitute, and should not be relied on as, legal advice. If you do require legal advice, contact the author.