What Is The Significance Of A Trademark In A Franchise Business

When investing to buy a franchise, a business owner who wants to buy a franchise has to do some things consciously. They have to meet directly with the franchisor; The Franchise Disclosure Document (FDD) needs to be read carefully; Activities such as inclusion of franchisees to save payroll FICA tax and creation of Doing Business as (DBA) file to run the franchise under their brand name are required. In addition, trademarks need to be considered. These are all important assets of the intellectual property of the franchise brand and they play an important role in any franchise. In this article, I will explain what a trademark is and how to get it as a franchisee.

• What Is A Trademark?

A trademark is a specific name, logo, slogan, design or tagline of a company. Trademarks help you stand out from your competitors and identify your brand in business competition. Trademarks allow customers to identify your products / services. When a trademark is not registered or the registration process is in progress, there is an ™ sign; The ® sign represents the registered trademark. When a trademark is registered, you become the official owner of that trademark. No one else can claim or use your brand for trademarks. If another company violates it, you can file a trademark theft lawsuit against them.

• Is It Necessary To Register A Trademark As A Franchisee?

It is important to understand how a trademark is transferred to a franchisee through a franchise agreement. Franchisors license the use of their trademarks at the time of issuance of the franchise. The trademark is protected under Section 13 of the Franchise Disclosure Document. Section 13 describes how franchise trademarks, copyrights and patents can be used. The franchisor must clearly display each trademark to each franchisee. The franchisor is required to notify the franchisee when the trademark is registered, while the registration process is in progress, or when it is in a renewed state. If for some reason the trademark is not registered, the following trademark registration declaration must be included in section 13.

“Our trademark is not registered. So we do not have the legal benefits and rights over our trademarks as registered trademarks. If your right to use the trademark has been legally challenged, you will need to change the trademark. That can increase your costs. ”

If an unregistered trademark is obtained from a franchisor, franchisee holders are required to seek legal advice.

• Importance Of Trademarks In The Franchise Business Model:

If the franchisor has registered all the trademarks related to the franchise business, it has many benefits for the franchisee. A registered trademark ensures that your franchise business is an innovative (original) concept and that your business is the only / specific business of that type. Trademarks give legal protection to your business concepts and creativity. Other copycats of your business prevent registered trademarks from doing business in their name by impersonating businesses. There is one more advantage of being registered a trademark, which is not much talked about. Continuation of a trademark or its lifespan. A registered trademark protects the intellectual property (IP) of any business for hundreds of years.

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