Franchise trade marks: check your brand before expanding

Running a successful outlet does not necessarily mean you can safely let other businesses use its brand. The name may belong to the founder personally, the trade mark may cover different services, or a similar earlier mark may already exist. In a franchise network, any dispute affects not only the franchisor but also partners who have invested in branded premises. Before offering your first franchise, carry out a separate review of the rights to your brand.

1. Distinguish between the company name, domain name and trade mark

Start by listing the branding customers actually see: the name on the shopfront, the logo, the name of your main product and the branding used for online orders. For each, record who uses it, who owns it and which document provides evidence of the relevant rights.

Registering a company name or domain name is no substitute for trade mark registration. Equally, long-standing use of a logo does not in itself demonstrate that you hold a registered trade mark for the intended services. An unregistered sign may enjoy protection in certain circumstances, for example under rules against unfair competition, but its legal status requires a separate assessment.

Use the databases of the Czech Industrial Property Office and the European Union Intellectual Property Office to check, in particular:

• the owner and identifying details of the trade mark;
• whether it is an application or an already registered mark;
• the wording or image of the protected sign;
• the list of goods and services and the territorial scope of protection;
• its current status, period of validity and any ongoing proceedings.

Do not limit your checks to identical names. Similar signs used for identical or similar goods and services may also pose a risk. For your core brand, commission a trade mark attorney or lawyer to carry out a search. A register extract is not, by itself, confirmation that using the brand cannot infringe anyone else’s rights.

2. Compare your protection with the planned franchise model

Assess the trade mark against what franchisees will be doing, not just the founder’s current activities. If a company-owned café also starts selling packaged coffee under the shared brand, check protection for the relevant goods and services separately. The class number alone is not enough: the specific list in the registration is what matters.

Similarly, distinguish between word marks and figurative marks. Registering a particular logo does not automatically provide the same protection as registering its wording separately. If the network uses several versions of its branding, seek advice on which are worth protecting separately and whether a planned redesign requires another application.

Check the territory too. A Czech national trade mark does not automatically cover expansion abroad. An EU trade mark provides protection across EU member states, but its suitability also depends on the search results and the company’s strategy.

A useful practical outcome is a simple table: sign – goods and services – territory – owner – protection status – action required. Assign responsibility for each gap and decide whether you can safely continue preparing the franchise offer before it is resolved. A registered trade mark is not a legal requirement for every franchise, but securing appropriate protection is an important safeguard for investment across the network.

3. Document your right to let partners use the brand

A common problem arises when the trade mark owner is not the company that will sign the franchise agreements. The brand may belong to the founder personally or to another company in the group. Common ownership alone does not entitle the franchisor to grant partners the right to use it.

If the franchisor does not own the trade mark, it must hold an appropriate licence, including the right to grant sublicences. Check its duration, territory, scope of use and termination provisions. The franchisor should not promise a partner broader or more secure rights than it actually holds.

The Czech Republic has no dedicated franchise legislation and no general requirement to register a franchise with a public authority. A franchise agreement is usually concluded as an unnamed contract under Section 1746(2) of Act No. 89/2012 Coll., the Civil Code. The Code’s licensing provisions are relevant to the licence, while Act No. 441/2003 Coll., on Trade Marks, governs trade marks. The relevant EU rules also apply to EU trade marks. Registering a trade mark therefore does not amount to approval of the franchise concept.

4. Establish licensing rules and manage protection

Identify the trade marks precisely in the contractual documentation and specify the permitted uses, such as premises signage, packaging, local advertising and online presentation. Clarify whether payment for the licence is included in the franchise fee. Brand guidelines may set out technical design requirements, but should not replace the provisions defining the rights granted.

Also specify who approves new versions of the branding and who handles suspected imitation. Partners should know whom to send photographs, an outlet address or a copy of an advertisement to, rather than independently sending legal threats on the franchisor’s behalf.

Finally, assign responsibility for monitoring registration renewals, changes of ownership and genuine use of the trade marks. Keep evidence of their use and regularly check that protection still matches the network’s offering.

Practical takeaway: Before signing your first franchise agreement, have an inventory of trade marks, documentary evidence of the franchisor’s right to grant licences and clear rules on use. Resolve any outstanding brand ownership issues before a partner orders their shop sign.