Registering a franchise agreement with Brazil’s INPI: when to consider it

When preparing a business for franchising in Brazil, it is easy to confuse three separate steps: registering the trade mark, signing the agreement and registering that agreement with Brazil’s National Institute of Industrial Property (INPI). Each serves a different purpose. Understanding the distinction helps avoid unnecessary expense, misplaced expectations and the mistaken belief that registration replaces the duty to disclose information to prospective franchisees.

1. Understand what registering the agreement does

Trade mark registration protects the sign that identifies products or services. A franchise agreement, meanwhile, governs the relationship between franchisor and franchisee: use of the trade mark, access to the business model, fees and other rights and obligations.

Registering the agreement with the INPI serves a different purpose. Article 211 of Law No. 9,279/1996, known as the Industrial Property Law, provides for franchise agreements to be registered so that they have legal effect in relation to third parties.

In practical terms, this distinguishes the effects between the signatories from those that may be relied upon in dealings with people or organisations that were not party to the agreement. Applying this rule to a particular situation requires legal analysis; it does not mean that every clause automatically becomes binding on every third party.

According to the INPI’s own guidance, registering a franchise agreement is optional. It should therefore not be presented to business owners as a mandatory general licence to start franchising.

Nor does registration certify profitability, constitute commercial approval of the model or guarantee that the operation will succeed. Assessing whether the business is ready remains the responsibility of those planning to expand.

2. Keep registration separate from obligations under the Franchise Law

The specific legislation governing franchising in Brazil is Law No. 13,966/2019, which repealed Law No. 8,955/1994. This law should guide the preparation of the franchise offer and the contracting process, separately from the administrative procedure before the INPI.

The law requires the franchisor to provide prospective franchisees with a franchise disclosure document, known in Brazil as the Circular de Oferta de Franquia (COF). It must be in Portuguese, presented objectively and accessibly, and contain the mandatory information about the business and the proposed relationship.

The COF must be delivered at least ten days before the franchise agreement or preliminary agreement is signed, or before the franchisee pays any type of fee to the franchisor or to a company or person connected with it. The law includes a specific rule for public tendering or public pre-qualification procedures.

In addition, agreements that take effect exclusively within Brazil must be written in Portuguese and governed by Brazilian law.

Registering an agreement with the INPI does not replace these requirements or, by itself, remedy shortcomings in the offer. Treat these as two separate workstreams: complying with the obligations governing the contracting process and assessing the usefulness of registration. Neither should be used as a shortcut for the other.

3. Turn the question into a documented decision

Before applying for registration, ask your legal adviser for an assessment with a clear objective. The question should not simply be “Can we register it?”, but “What legal effect do we need this registration to achieve?”.

A useful checklist includes:

• Purpose: what specific situation justifies seeking legal effects in relation to third parties?
• Parties and rights: who is granting the rights, and which documents demonstrate their authority to do so?
• Subject matter: does the agreement adequately identify the franchise and the rights involved?
• Scope: is the arrangement entirely domestic, or does it involve international elements that require further assessment?
• Ongoing management: how will amendments, changes to the parties and significant changes to the subject matter of the agreement be handled?

Avoid deciding solely on the basis that “every franchise network does it this way”. The justification should reflect the actual agreement and the interests of the prospective franchisor.

Keep an internal record of the conclusion: the intended purpose, the reasoning, estimated costs, the person responsible and the circumstances that would trigger a review. If you decide not to register at that stage, retain the assessment. A change in the contractual structure may make a fresh review necessary.

4. Prepare the documents without duplicating work

If you decide to register, check the INPI’s current requirements and procedures before filing. Forms, required documents and fees should be checked at the time of application, rather than copied from an earlier filing.

Put together a file containing the signed agreement, its annexes, any amendments, details identifying the parties and relevant documentation for the rights involved. Check that company names, representatives, specified trade marks and contractual periods are consistent. Seemingly minor discrepancies may require clarification and cause delays.

Assign someone to monitor communications and any requests from the INPI, with legal support. Afterwards, keep the outcome of the procedure linked to the correct version of the agreement. Do not assume that a registration automatically covers new agreements or future amendments.

When communicating with prospective franchisees, describe registration for what it actually represents, without presenting it as a seal of franchise quality.

Putting it into practice: before filing, write one sentence stating the legal effect you intend to achieve. Confirm that purpose with a specialist adviser, and continue to treat compliance with the Franchise Law as a separate obligation.