Buying a Franchise in Egypt: How to Verify Trade Mark Rights

You may be negotiating with a company that runs successful outlets but does not own the trade mark or have the right to grant franchises to others. Seeing the name on shopfronts or in a polished investment presentation is therefore not enough. Before entering Egypt’s franchise market, check the chain of rights that allows you to use the trade mark, then make sure your contract protects your continued use of it throughout the agreed term.

1. Distinguish the company name from trade mark ownership

Start with a direct question: who owns the trade mark that will appear on my premises? The owner may be a foreign company, while an Egyptian company handles negotiations and collects payments. This arrangement is not inherently problematic, but it requires documents establishing each party’s authority.

A commercial register entry alone does not prove ownership of a trade mark. Nor does registering a domain name or holding social media accounts amount to trade mark registration. Ask for details of the contracting company, the trade mark documents and, if the company and owner have different names, evidence of the relationship between them.

Compile a file containing:

• The trade mark registration certificate and renewal details, or details of the pending application if registration is not yet complete.
• The owner’s name as it appears on the register, rather than in the marketing material.
• A representation of the registered trade mark: does it cover the name and logo you will use?
• The goods or services covered by the registration and their relevance to your outlet’s activities.
• Details of any transfer of ownership or change in the rights holder’s name.

A registration application does not mean that registration is complete. Equally, do not assume that a certificate issued outside Egypt is sufficient on its own to establish protection there. Ask your lawyer to verify the local registration or international protection effective in Egypt, as appropriate.

2. Trace the franchisor’s authority to grant you a licence

If you are contracting with a master franchisee rather than the trade mark owner, ask to see the document authorising it to grant sub-franchises. Access can be arranged subject to confidentiality obligations, but saying that “the original agreement is confidential” is no substitute for proving authority to enter into the contract.

Review three connected points: the scope of the rights, their duration and the limits on passing them on to others. Does the underlying agreement actually permit sub-licensing? Does it cover the activity you intend to carry out? Does it require the trade mark owner’s prior approval for each new franchisee?

Also compare the expiry date of the underlying agreement with that of your proposed contract. If the franchisor’s rights expire before the end of the term offered to you, do not rely on a promise that it will renew its agreement later. Ask for this mismatch to be addressed in writing before committing.

Where there is more than one intermediary between you and the owner, every link in the chain must be documented. A marketing letter from the owner or a photograph taken together does not, on its own, prove authority to sign a franchise agreement or collect fees on the owner’s behalf.

3. Understand the Egyptian rules governing your checks

Egypt has no standalone franchise legislation, no generally mandatory pre-contractual disclosure regime specific to franchising, and no general central register of franchise agreements. Do not therefore expect a single government document to confirm that every aspect of the deal is sound.

Depending on its substance, the relationship is governed by Civil Code No. 131 of 1948, Commercial Law No. 17 of 1999 and Intellectual Property Rights Protection Law No. 82 of 2002. The last of these is important when checking the trade mark, the licence to use it and the protection of related rights. The technology transfer provisions of the Commercial Law may also apply if the arrangement meets their criteria; calling it a “franchise” is not enough to determine its legal classification.

There are also professional disclosure guidelines, but these are no substitute for the law or the terms of the contract. Do not treat a review period set out in professional guidance as a general statutory period binding on all franchisors in Egypt.

Instruct a specialist Egyptian lawyer to verify the trade mark’s current status with the competent authority and review whether the licence needs to be registered or recorded, along with the legal effects of doing so. Do not confuse the absence of a general franchise register with any procedures that may apply to the trade mark or its licensing.

4. Turn your findings into contractual protection

Documents establish the position at the time of your checks, but the contract must address what may change after you open. Ask for an explicit declaration that the franchisor holds the necessary rights and is authorised to grant them to you throughout the contract term, together with disclosure of any known relevant disputes or restrictions.

Discuss with your lawyer the inclusion of provisions specifying:

• The franchisor’s obligation to maintain the necessary rights and renew the relevant registrations.
• Its obligation to notify you of third-party claims, the expiry of the underlying licence or changes to it that affect you.
• Who is responsible for handling a dispute and paying defence costs if another party challenges your authorised use.
• The remedies available if you can no longer use the trade mark, including termination, compensation or refunds on defined terms.
• Who bears the cost of removing or changing the branding if this becomes necessary because the franchisor has failed to maintain the required rights.

If you are contracting with a master franchisee, discuss the possibility of a direct agreement with the trade mark owner allowing the relationship to continue on clear terms if the master agreement ends. This is not an automatic right and should not be assumed without a binding agreement.

5. Base your decision on a complete set of documents

Before signing, check that the party receiving the fees is correctly identified in the contract and that its stated capacity matches its role. Verify the signatory’s authority. Ask for key authorisation documents to be attached as schedules to the contract or clearly referenced in it, rather than relying on scattered correspondence.

Pause for further review if ownership cannot be established, the right to grant sub-licences remains unclear, or your contract term extends beyond the franchisor’s available rights without adequate protection. These are not administrative details: they affect your ability to operate under the name you are paying to use.

The practical bottom line: do not buy the right to use a trade mark until you have established three things: its protection in Egypt, the contracting party’s authority to license it to you, and the contractual remedies available if continued use becomes impossible.