Buying a franchise: how to check trade mark rights

Buying a franchise means joining a franchise network and gaining the right to operate under a particular brand, but it does not make you the owner of its trade mark. Before signing, check that valid protection exists in Croatia and that the party you are contracting with can genuinely grant you the right to use it. A recognisable name, a polished website and a large number of outlets do not, on their own, prove those rights.

1. Establish which trade marks you will be entitled to use

A brand may include a name, logo, slogan and other identifiers, and their legal status may differ. A company name entered in the court register or a registered internet domain is not the same as a registered trade mark. Do not settle for a general statement that the “brand is protected”.

Ask the franchisor for a list of the trade marks you will use and, for each one:

• the registration or application number;
• details of the rights holder;
• a representation of the protected mark;
• the territory in which protection applies;
• a list of the goods and services covered;
• the status and duration of protection.

A trade mark application is not the same as a registered trade mark. If the application is still pending, ask for a clear explanation of the risks and contractual provisions addressing what happens if it is refused.

Compare the documentation with the branding you will be required to use on shopfronts, packaging, invoices and digital channels. If the registered representation differs from the current logo, seek a professional assessment of whether the existing protection covers your intended use. In particular, check that it covers the activities you will actually carry out, rather than just other goods or services offered under the same brand.

2. Check the protection that applies in Croatia

Protection for the Croatian market may come from a national trade mark registered with the Croatian State Intellectual Property Office, an EU trade mark registered with the European Union Intellectual Property Office, or an international registration effective in Croatia or the European Union. Registration in another country does not, in itself, provide protection in Croatia.

Check the details in the relevant official databases. For an international registration, seeing its registration number is not enough: you need to check the designated territory and the status of protection there. Record the date of your checks and keep the extracts with your franchise purchase documentation.

Check whether the trade mark holder is the same person or entity named in the agreement. Look out for recorded proceedings that could affect the rights, such as revocation or invalidity proceedings. However, a register extract will not necessarily reveal every dispute, so request a written statement covering existing third-party claims and proceedings relating to the marks you will use.

If the brand is new to the Croatian market, consider commissioning a professional search for earlier rights. Registration is not an absolute guarantee that a third party will not challenge its use. Weigh the cost of a targeted check against the potential cost of replacing shopfront signage, packaging and other business materials.

3. Trace the chain of authority through to your agreement

The franchisor does not have to own the trade mark. It may operate under a licence or an agreement authorising it to develop the franchise network in a particular territory. In that case, the key question is whether it can grant you the right to use the mark.

Ask for evidence showing the link between the trade mark holder and your prospective contractual partner. If the full underlying agreement is unavailable for confidentiality reasons, request relevant extracts or confirmation from the rights holder, and have a lawyer check whether these are sufficient.

In particular, compare:

• the territory for which the franchisor has authority;
• the permitted uses of the trade mark;
• the right to grant sublicences to franchisees;
• the duration of the underlying rights and your agreement;
• the consequences if the relationship between the trade mark owner and the franchisor ends.

For example, if the franchisor’s rights expire before your franchise agreement does, a promise that they will “definitely be renewed” is not sufficient protection. Ask for written provisions ensuring continuity of use, or clearly defined rights if continuing to trade under the brand becomes impossible. Confirmation from the rights holder is useful, but it does not replace enforceable contractual obligations.

4. Agree who is responsible if the rights are challenged

Croatia has no specific franchise law or mandatory franchise-specific pre-contractual disclosure document. Franchise relationships are governed primarily by the Croatian Civil Obligations Act, while trade mark protection and use are covered by the Croatian Trade Mark Act and, for EU trade marks, Regulation (EU) 2017/1001 on the European Union trade mark. Depending on the nature of the relationship, other general legislation also applies, including competition rules.

Ask for an express statement in the agreement that the franchisor is authorised to grant the agreed rights. Specify who maintains and renews registrations, who informs you about disputes, and who arranges and pays for the defence if a third party challenges your use of the trade mark.

Also specify how costs will be allocated if you have to stop using the mark, including replacement materials, changes to digital channels and other documented expenses. Negotiate rights to suspend certain payments or terminate the agreement if lawful use of the brand is no longer possible. These are not automatic rights arising simply from membership of a franchise network; they need to be carefully written into the agreement.

Practical takeaway: before signing, verify three linked elements: trade mark protection in Croatia, the franchisor’s authority to grant you the right to use it, and contractual responsibility if that right fails.