Protecting your trade mark before expanding a franchise in Croatia

A name that customers recognise is a valuable asset for an established business, but recognition is not the same as legal protection. Before allowing another business to operate under your brand, establish what you can license and on what terms. Within a franchise network, unclear ownership or inadequate trade mark protection can put every member’s investment at risk, not just the founder’s.

1. Check what you own and what you merely use

Start by listing the elements that distinguish your business in customers’ eyes: your business name, logo, the names of key services or products, and any slogan. For each element, note who created it, who uses it and whether there is documentation establishing the relevant rights.

Registering a company name in the court register and registering an internet domain are not substitutes for registering a trade mark. A trade mark protects a sign for specific goods or services within a defined territory. It does not confer general ownership of a word for all business purposes.

Pay particular attention to situations where an external agency created the logo, the founder applied for the trade mark in their own name, or several related companies use the same name. A paid design invoice does not necessarily settle all copyright issues. The company that will act as franchisor must hold the appropriate rights to use the sign and authorise franchisees to use it.

Put together a simple file of supporting documents:

• details of trade mark applications and registrations;
• agreements with creators and rights holders;
• documents relating to assignments of rights or licensing;
• details of domain names and access to digital accounts;
• registration renewal deadlines.

If someone else owns the trade mark, formalise the relationship in a written agreement before offering a franchise. In particular, check whether you may grant sublicences and what happens if your own licence ends.

2. Choose protection that matches your actual expansion plans

Before applying, check for existing identical and similar signs. It is not enough to establish that nobody has exactly the same name: similarities between signs used for related goods or services can also cause problems. An internet search is a useful initial check, but it is no substitute for searching trade mark registers and obtaining a professional risk assessment.

Croatia’s State Intellectual Property Office is responsible for national protection, while European Union trade marks are registered by the European Union Intellectual Property Office, known as EUIPO. A national trade mark provides protection in Croatia, whereas an EU trade mark covers all EU Member States. Wider territorial coverage is not automatically the better choice: base your decision on your expansion plans, costs and any earlier rights held by others.

Goods and services are categorised under the Nice Classification. Your list should reflect what you offer and reasonably plan to offer. For example, protecting a name for catering services does not automatically cover packaged food products that you intend to sell under the same name.

Also consider protecting the name separately as a word mark and the logo as a figurative mark. Their scope of protection differs. Filing an application is not a guarantee of registration, either, so do not base your franchise opening plans on the assumption that the application will succeed.

3. Set out the right to use the trade mark clearly in the franchise agreement

Croatia has no dedicated franchise law, no separate general franchise register and no standard pre-contractual disclosure document prescribed by law for franchises. This does not mean that franchise networks operate outside a legal framework.

Contractual relationships are governed by Croatia’s Civil Obligations Act, including the principle of good faith and fair dealing. The Trade Mark Act is central to national trade mark protection, while Regulation (EU) 2017/1001 governs EU trade marks. The Companies Act regulates company names, among other matters. Contractual restrictions must also comply with the Competition Act and applicable EU rules.

Your agreement should therefore specify:

• which trade marks are licensed, including identifying details;
• the territory, duration and permitted forms of use;
• whether the licence is exclusive or non-exclusive;
• rules for premises signage, packaging, advertising and digital channels;
• procedures for approving new materials and monitoring quality;
• obligations when the agreement ends.

Exclusive franchise territory is not the same as an exclusive trade mark licence. Align these provisions so that you do not inadvertently restrict your own operations or grant overlapping rights to different franchisees. Territorial restrictions, online sales and non-compete clauses particularly require review by a lawyer.

4. Organise monitoring and departure from the network

Registration is not the end of trade mark management. Appoint someone to monitor renewal deadlines, retain evidence of genuine use and check for potentially conflicting signs. A trade mark may become vulnerable to revocation if it is not used for the period specified by law, so keep systematic records of invoices, advertisements and photographs of branded products or premises.

Explain to franchisees whom they should notify if they suspect unauthorised use. Do not leave each location to issue legal threats or reach agreements with third parties independently. A consistent procedure protects the reputation of the whole network.

Take equal care to set out how use must cease: removing signage, dealing with stocks of packaging, changing digital profiles and transferring account access where this is contractually agreed and permitted by the platform’s rules. Set a deadline for each obligation and specify how compliance will be checked.

Practical takeaway: before making your first franchise offer, compile a list of signs, verify the rights holders and the scope of their rights, and agree clear rules for use and for ending that use. Resolve outstanding rights to the name before prospective franchisees invest, not after their locations have opened.