Buying a franchise: how to check trade mark rights in Argentina

When you buy a franchise, you pay to operate a business under a particular brand. But a familiar name, attractive premises or a large social media following do not prove that the party offering you the contract can authorise its use. Before committing any money, check the rights to that asset: this is a practical step that protects your investment and supports trust within the franchise community.

1. Understand what rights the franchisor must hold

In Argentina, franchise agreements are specifically governed by Articles 1512 to 1524 of the national Civil and Commercial Code. They should not be treated as agreements with no specific legal framework.

Article 1512 states that the franchisor must either exclusively own the intellectual property rights, trade marks, patents, trade names and copyright included in the system, or have the right to use them and pass those rights on to the franchisee under the terms of the contract. This means that the trade mark does not have to be registered in the name of the party signing the agreement, but sufficient, verifiable authorisation must be in place.

Also relevant is Law No. 22,362 on Trade Marks and Trade Names, which governs trade mark protection. The National Institute of Industrial Property, known by its Spanish acronym INPI, administers the trade mark register. Registration does not certify a franchise’s profitability or quality: it allows you to check the status of a specific right.

2. Search for the exact trade mark, not just the trading name

First, ask for the application and registration numbers of the trade marks you will use. Also request details of the owner, the registered classes and the relevant certificates. Then cross-check those details using the INPI’s search tools, preferably with professional assistance.

The search should cover the name, logo and any relevant variants that will appear on the shopfront, packaging and digital channels. Registration of the name alone does not establish that every visual version is protected.

Check the following points:

• Owner: Does the owner match the documentation supplied by the franchisor?
• Status: Is the application still pending, or has registration been granted?
• Scope: Which goods or services does the protection cover?
• Validity: When does the registration expire, and what renewal documentation is available?
• History: Are there any oppositions or other proceedings that need explaining?

Trade marks are organised into classes of goods and services. Finding a matching name is not enough: you need to establish whether the protection covers the proposed business activity. Equally, a search that returns no results does not automatically mean the name is available.

3. Trace the chain of authorisation

If the registered owner is another person or company, ask for the documents linking that owner to your prospective franchisor. These might include, for example, a licence or a master franchise agreement that permits the grant of franchises to third parties.

Do not settle for assurances that both companies belong to the same group or share shareholders. A corporate relationship is no substitute for contractual authorisation.

Your lawyer should check that the authorisation permits the intended use in Argentina, covers the trade marks and other brand identifiers you will use, and allows the franchisor to grant you those rights. They should also review its duration and any conditions that could affect its continuation.

If your contract will outlast the franchisor’s authorisation, you need a documented explanation of how your right to use the trade marks will be maintained. A promise to renew is not the same as an agreed renewal.

Confidentiality may justify withholding information unrelated to the transaction, but it should not prevent your adviser from verifying that the party selling you the franchise has the necessary authority.

4. Reflect the findings in the contract and budget

The checks do not end when you find a valid registration. The contract should identify the authorised trade marks, specify their permitted uses and set out how third-party claims will be handled. The Code provides for obligations to defend and protect these rights; seek advice on how those obligations apply to your particular agreement.

Ask what would happen if a trade mark dispute made it necessary to change the business’s branding. Negotiate who would pay for changes to signage, packaging, uniforms, advertising materials and digital channels. Do not assume these costs will be covered.

Before paying a reservation deposit, record in writing which documents are still outstanding and which conditions must be met before proceeding. If you discover a pending application, insufficient authorisation or a dispute, do not automatically assume you cannot buy the franchise: ask for a legal assessment of the risks and the safeguards available.

Practical takeaway: Put together a file containing the register search results, certificates, authorisations and reviewed contract clauses. Proceed once you can show, with documentary evidence, who is authorising you, what you may use and for how long.