Buying a Franchise in Australia: Check Trade Mark Rights

A recognised name can be a major reason to buy a franchise. But paying a franchise fee does not make you the owner of that name. Before joining Australia’s franchising community, establish who controls the brand, whether the franchisor can authorise your use of it, and how securely those rights support the business you are buying.

1. Check who actually owns the brand

Start with the exact trading name and logos you will use, rather than just the franchisor’s company name. Search IP Australia’s Australian Trade Mark Search and compare the results with the intellectual property information in the disclosure document.

Record the registered owner, application or registration status, and the goods or services covered. A pending application is not the same as a registered trade mark. Equally, a registration covering one activity does not necessarily provide protection for every product or service the franchise sells.

A business name registration is not a substitute for trade mark protection. Nor does ownership of a website address establish ownership of the brand.

Ask the franchisor for a written explanation if:

• The trade mark owner differs from the company offering the franchise.
• The brand operates under a licence from an overseas owner.
• Important names or logos appear to be unregistered.
• The records do not match the branding shown in the sales presentation.

These findings do not automatically make a franchise unsuitable. Group companies commonly hold intellectual property separately. The important question is whether there is a sound legal chain allowing the franchisor to grant the rights it is selling.

2. Match your rights to your planned business

Read the intellectual property clauses in the franchise agreement alongside the disclosure document. Identify precisely which names, logos, systems and other materials you may use, for which activities and for how long.

Australia specifically regulates franchising through the mandatory Franchising Code of Conduct, enforced by the Australian Competition and Consumer Commission. The current Code commenced on 1 April 2025, with some requirements applying from 1 November 2025. It requires pre-contract disclosure, including information about relevant intellectual property. The Australian Consumer Law also prohibits misleading or deceptive conduct, including misleading representations about a franchise opportunity.

Those protections do not remove the need to examine your particular permission to use the brand. Ask your solicitor to check whether any underlying licence supports the proposed franchise term and what happens if that licence ends.

Then test the agreement against practical activities. Can you use the brand on your own social media accounts, delivery listings, vehicles and locally produced promotional materials? Who approves those uses, and who controls the accounts?

Ask for any essential permission to be documented before signing. A salesperson’s informal assurance is a poor foundation for an activity your business will rely on.

3. Establish who handles challenges and changes

Even an established brand can face a trade mark dispute. Ask whether there are existing claims or restrictions affecting the intellectual property you will use, and have any disclosed issue assessed independently.

The agreement should be checked for responsibility when a third party alleges infringement. Find out who must be notified, who controls the response and who pays legal costs. Do not assume the franchisor will automatically defend you or reimburse every loss.

Also ask what happens if the brand must change. Focus on the consequences of losing or replacing intellectual property rights, rather than routine shop updates:

• Who pays to replace branded stock, uniforms and signs?
• Who updates websites, customer-facing accounts and promotional materials?
• Is support available if trading is interrupted?
• What contractual remedies apply if the promised brand can no longer be used?

Treat vague answers as unresolved risks, not as evidence that the situation could never arise. Ask your accountant to assess the financial exposure once your solicitor has explained the contractual allocation of responsibility.

4. Understand what you must hand back

Brand permissions usually end when the franchise relationship ends. Before buying, establish what you must stop using, remove, return or transfer.

Check the treatment of local domain names, telephone numbers, social media accounts, photographs and promotional content. An account you create and manage may still be subject to contractual transfer requirements. Customer information raises separate privacy and contractual questions; it should not simply be treated as another piece of branding.

List the required actions, deadlines and likely costs. This helps distinguish assets you are purchasing from rights you are only permitted to use temporarily.

Practical takeaway: Before paying for a brand, verify its ownership, the franchisor’s authority and your permitted uses. Resolve gaps in writing so you understand exactly what your franchise fee buys.