Franchise trade marks at Brazil’s INPI: what to check before buying

When you buy a franchise, you invest in the right to operate under a brand, but you do not become its owner. Before committing funds, it is therefore worth confirming whether the franchisor can authorise that use and what risks are involved. In franchising, a well-known brand is no substitute for checking the paperwork: problems with ownership or protection can affect signage, advertising and business continuity.

1. Understand what the law requires for the trade mark

Brazil’s Law No. 13,966/2019, the Franchise Law, requires the franchisor to own, or have applied for, the rights to the trade marks and other intellectual property covered by the franchise arrangement, or to have express authorisation from the rights holder.

This means that a franchise can be offered while a trade mark application is still under examination. The absence of a granted registration does not, in itself, make the offer unlawful. However, an application does not provide the same security as a registration in force: it may face opposition or be refused.

The law also requires the Franchise Disclosure Document, known in Brazil as the Circular de Oferta de Franquia (COF), to state the status of the trade mark and other intellectual property rights relating to the franchise. It must describe those rights and provide the registration or application number, as well as the class and subclass, where applicable, with the relevant authorities.

Trade mark protection is governed by Law No. 9,279/1996, the Industrial Property Law. As a general rule, ownership of a trade mark is acquired through a registration validly granted by Brazil’s National Institute of Industrial Property (INPI), subject to statutory exceptions. A company name, internet domain or social media profile is no substitute for that registration.

2. Check the case history, not just the certificate

Ask the franchisor for the application or registration numbers of the trade marks your outlet will actually use. There may be separate registrations for the name, the symbol and the version combining both.

Then search INPI’s public trade mark database. Search by the number provided and also check the brand name and the rights holder. The aim is to verify that the commercial documents match the official position.

Use a checklist to organise your review:

• Rights holder: who is listed as the applicant or registered owner?
• Form of the mark: does the protected mark match the name and logo being offered?
• Goods and services: does the specification cover the activities relevant to your outlet?
• Status: is the application under examination, is the registration in force, or has the application been refused or closed, or the registration ceased to have effect?
• Case history: are there any oppositions, appeals, invalidity proceedings or other challenges?
• Term of protection: when does the protection period end, and what is the renewal status?

Do not treat an opposition as automatic proof that the trade mark has been lost. It indicates a challenge that needs to be assessed. Equally, an old certificate alone does not show that the registration remains in force.

Keep a dated copy of the search results. If there are discrepancies or significant proceedings, seek an assessment from an intellectual property specialist before proceeding.

3. Verify the franchisor’s authority

The rights holder listed at INPI may be different from the company offering the franchise. There may be a legitimate reason for this, for example where the trade mark belongs to another group company or an overseas owner.

In that case, request documentary evidence of the authorisation. Belonging to the same corporate group is no substitute for verifying the authority to grant use of the trade mark.

Ask your lawyer to check whether the authorisation permits use by franchisees, covers Brazil and remains valid for the intended term of the agreement. Also establish what happens if the underlying authorisation ends early.

Ask direct questions: who granted the rights to the franchisor? Can it pass those rights on under the terms being offered? Are there any restrictions that could affect your business?

Do not confuse trade mark registration with registration of the franchise agreement. These are separate acts. Registration of the agreement with INPI, provided for in Article 211 of Law No. 9,279/1996 so that it has effect against third parties, does not replace trade mark protection.

4. Establish who bears the risk of a change

Even a registered trade mark can face disputes. Before buying, check how the agreement allocates responsibility if use is restricted, rights are lost or the visual identity has to change.

Get written answers to four questions:

1. Who manages and pays for the defence of the trade mark?
2. Who pays to replace external signage, uniforms, packaging and advertising materials?
3. What happens to payments due under the agreement if the outlet has to suspend trading?
4. What options are available if the trade mark can no longer be used, including possible closure and determining liability?

These arrangements are not automatically the same across all franchise networks. They need to be assessed and, where possible, negotiated. Do not assume that the franchisor will pay for every change, or accept verbal assurances as a sufficient answer.

Practical takeaway: before investing, gather an up-to-date INPI search, evidence of the franchisor’s authority and the contractual clauses covering disputes and brand changes. If these three elements do not align, resolve the discrepancies before signing.