Buying a franchise in Belgium: check the trade mark rights

When you buy a franchise, part of what you pay for is the right to operate under a recognisable brand. But a familiar name does not prove that the business you are contracting with is entitled to license it to you. Within a franchise network, the trade mark owner, the international franchise operator and the Belgian franchisor may be different companies. Before buying, check how the right to use the trade mark reaches your business and what happens if that legal basis falls away.

1. Check which trade marks you will actually use

Ask the franchisor for a list of the trade marks you will need for your outlet. These may include the name on the premises, the logo, any product brands and service names. For each trade mark, ask for the registration number, registered owner and relevant territory.

For an outlet in Belgium, relevant protection may include Benelux trade marks, EU trade marks and international registrations effective in Belgium. Check the details in the official registers of the Benelux Office for Intellectual Property, the European Union Intellectual Property Office or the World Intellectual Property Organization. For an international registration, also have its territorial coverage assessed.

Do not simply check whether the name appears. Also check:

• whether it is an application or a registered trade mark;
• who is listed as the owner;
• which goods and services the trade mark is registered for;
• its current status and expiry date;
• whether the registered mark matches what you will be required to use.

A trading name, a domain name and a trade mark registration are not the same thing. Nor does a register entry alone prove that the trade mark is free from legal disputes. Ask separately about any ongoing disputes that could affect your use.

2. Trace the chain from owner to franchisee

Is the franchisor not the trade mark owner? That is not necessarily a problem. A licence or master franchise agreement may authorise it to appoint local franchisees. However, that authority must cover your intended use.

Ask for written details of the legal basis on which the franchisor offers the trade mark. Have an adviser check whether it may grant sublicences for Belgium, for your activities and for the intended contract term. A general statement that it is an “official partner” does not provide sufficient assurance.

You do not necessarily need to receive the full international agreement. Relevant extracts, confirmation from the trade mark owner or access for your legal adviser may be useful alternatives. However, these arrangements must not leave essential restrictions undisclosed.

Pay particular attention to differences in duration. If your franchise agreement runs for longer than the underlying licence, there must be a clear basis for the promised continued use of the trade mark. Also ask what happens if that licence ends early. Your local agreement cannot, by itself, replace missing permission from the trade mark owner.

3. Compare the proposed use with the contract and Belgian disclosure requirements

Belgium has specific pre-contractual rules for commercial cooperation agreements that meet the statutory definition. These appear in Book X, Title 2, Articles X.26 to X.33 of the Belgian Code of Economic Law, read together with Article I.11, 2°. Franchise agreements may fall within their scope.

Under Article X.27, you must receive the draft agreement and a separate pre-contractual information document, commonly known by its Dutch abbreviation PID, at least one month before entering into the agreement. The PID contains key contractual provisions and socio-economic information. General contract law and the applicable trade mark law are also relevant.

Ask your adviser to check whether the description of the trade mark rights in the PID is consistent with the draft agreement and the available supporting documents. The disclosure process is not a government guarantee that the franchisor holds all the necessary rights.

Then establish exactly what you are authorised to do. Does permission to use the trade mark cover your signage, website, social media, local advertising and staff uniforms? What prior approvals are required? Record the permitted uses so that you do not pay for materials you later discover you cannot use. A right to use a trade mark does not, of course, make you its owner.

4. Allocate the risk if trade mark use becomes impossible

Before signing, discuss who will take action and who will pay if a third party challenges your use of the trade mark. Must you notify the franchisor immediately? Who will organise the legal defence? Who will bear the cost of any necessary changes?

Also negotiate what happens if the franchisor loses its licence or the trade mark is no longer available. Consider the cost of replacing signage, updating digital channels and dealing with temporary disruption to your business. Set out what solution the franchisor must provide and what rights you have if no workable solution is offered.

Distinguish between problems for which you are responsible, such as unauthorised use, and defects in the rights the franchisor has offered. Have any compensation and termination provisions reviewed by a legal adviser.

Practical conclusion: sign only once you know which trade marks you may use, who authorises that use and who bears the risk if that permission falls away.