Buying a Franchise in Egypt: How to Check Trade Mark Protection

You may choose a franchise because customers recognise its name, only to discover that the right to use that name in Egypt is unclear or disputed. In franchising, neither a brand’s reputation nor photographs of its outlets prove that the rights you are paying for are secure. Before buying signage or commissioning packaging, check the trade mark protection and the scope of the licence, and agree what happens if you can no longer use the brand.

1. Understand the difference between buying the business and licensing the trade mark

A franchise agreement does not make you the owner of the trade mark; it gives you the right to use it on specified terms. The agreement should therefore identify the licensed marks, show how they appear, specify the activities for which they may be used and state the licence term. A phrase such as ‘use of the trade mark and all its elements’ may not, on its own, clarify whether the licence covers the Arabic name, the foreign-language logo and any sub-brands.

Egypt has no standalone franchise law, nor a general franchise-specific regime requiring franchise agreements to be registered or a standardised disclosure document to be provided before a sale. However, the relationship remains subject to general law. Civil Code No. 131 of 1948 governs general contractual principles, Commercial Law No. 17 of 1999 applies depending on the nature of the relationship, and Intellectual Property Rights Protection Law No. 82 of 2002 regulates trade mark protection and licensing.

The technology transfer provisions of the Commercial Law may also apply if the agreement meets the relevant criteria, including specific disclosure obligations. Do not assume that the absence of a franchise-specific disclosure document means there is no legal duty to provide information, or that registering a company is equivalent to registering its trade mark.

2. Request documents proving protection in Egypt

Start with a written list of every name and logo that will appear on the outlet’s frontage, products and advertising. Then request the relevant protection documents, rather than a marketing presentation about the brand’s global reach. Registration in the franchisor’s home country does not, by itself, establish protection in Egypt.

A practical due diligence file should include:

• Details of current trade mark registration in Egypt, whether through a national registration or international protection extending to Egypt.
• The registered owner’s name, registration numbers, protection expiry dates and evidence of renewal where due.
• A statement of the goods and services covered, together with an image of the registered mark.
• Documents relating to any transfer of ownership or change in the owner’s name that affects how the register should be read.
• Details of pending applications and any known material objections or disputes.

Ask a specialist lawyer to verify the legal position against the relevant registers. Distinguish between filing an application and obtaining registration: an application is not evidence that registration has been completed. Nor should you assume that protection for a name in foreign lettering automatically resolves the status of the Arabic version you will actually use.

3. Match the protection and licence to your outlet’s activities

A registration certificate is not the end of the checks. What matters is whether the protection relates to the goods and services you will offer, and whether the licence covers your intended use. For example, a name may be registered for restaurant services, while your business plan includes selling branded packaged products. This deserves a separate review, rather than an assumption that the certificate covers everything.

Create a table with three columns: planned use, the document covering it and the question that needs resolving. Include frontage, food or service menus, packaging, uniforms, advertising and digital pages. The aim is to identify gaps before spending money, not simply to collect paperwork.

If the party contracting with you is not the registered owner, request evidence that it has the right to license the mark to you. The chain of licences must permit this and cover Egypt, the proposed activities and the intended term. For confidential documents, a legal review subject to confidentiality restrictions can be arranged instead of accepting a verbal assurance.

Also ask about any procedures needed to record the licence or make it enforceable against third parties in your circumstances. Do not confuse these procedures with registering a franchise agreement with a franchise-specific authority: they are separate issues.

4. Allocate the risks of trade mark challenges in the contract

Checking documents reduces risk, but it cannot prevent every future claim. Seek a contractual representation from the franchisor that it holds the rights needed to grant the licence, together with disclosure of known material restrictions and disputes. Add an obligation to maintain and renew protection, and to notify you of anything that could threaten continued use.

The agreement should clearly answer the following questions:

• Who will respond to and defend a claim by a third party that use of the mark infringes its rights?
• Who will bear legal defence costs and damages, and subject to what limits and conditions?
• What should you do if you receive a legal notice, and who has authority to approve a settlement?
• Who will pay to replace signage and packaging if the brand must be changed?
• How will a halt in use affect fees and operating obligations?

These are rights to negotiate and draft into the agreement, not automatically guaranteed compensation. It also makes sense to distinguish between a claim arising from your authorised use and one caused by altering the logo or using it outside the permitted scope.

5. Make completed checks a condition of spending

Before committing to costs that will be difficult to recover, agree in writing which documents are required, when they must be delivered and the criteria for accepting them. If a material gap emerges, such as a failure to establish the right to grant the licence or a dispute threatening use of the mark, do not treat a promise to resolve it later as adequate protection.

You can negotiate to defer specified financial obligations until verification is complete and set out what happens if the conditions are not met. Ask your lawyer to review this mechanism alongside the rest of the agreement so that it does not conflict with an unconditional payment obligation.

Practical takeaway: Do not pay merely for a famous name. Verify its protection in Egypt and the franchisor’s right to license it to you, then specify in the contract who bears the cost if you lose the ability to use it.