Franchising and trade marks: protecting your network’s shared name

When you expand an existing business into a franchise network, its name becomes the shared identity of a whole community of business owners. However, a locally recognised name is not automatically a secure foundation for nationwide growth. Before signing your first franchise agreement, establish which brand identifiers you can protect, who owns them and on what terms others may use them. This guide focuses on trade mark preparations from the franchise founder’s perspective in Finland.

1. Establish what you actually own

Start by listing the identifiers used in your business: the company name, the trading name customers see, the logo, any product names and domain names. For each, record the rights holder, when use began, any registration and the document on which your rights are based. Do not assume that incorporating a company or registering a domain name settles every legal question.

A company name, a trade mark and a domain name are different things. A company name entered in the Finnish Trade Register identifies the business. A trade mark distinguishes its goods or services from those of other businesses. A domain name is a web address; controlling it does not, on its own, give you trade mark protection for the name.

Pay particular attention to the contracts for any logo created by an external designer. Commissioning graphic design work does not necessarily transfer all copyright to the client. Obtain written confirmation that your rights cover the planned use across the network, any necessary modifications and the granting of usage rights to franchisees.

If you set up a new company to manage the network, also check how the rights will be transferred. Arrangements between the existing business, the founder and the new franchise company must be documented. The franchisor must either own the identifiers or hold sufficient rights to license them.

2. Check the name before committing to expansion

Carry out clearance checks before ordering signage for the network, starting franchisee recruitment or promising applicants the right to use a particular brand. The aim is to identify earlier rights that could prevent registration or use in your planned business activities.

Search trade marks valid in Finland, company names and similar identifiers already used in the market. Looking only for exactly matching spellings is not enough. Similarities in pronunciation, appearance or meaning may also matter when assessing the likelihood of confusion involving identical or similar goods and services.

At the same time, assess how distinctive the name is. A name that directly describes the quality, type or characteristics of a service may be difficult to register. Registering a logo does not necessarily give you exclusive rights to a descriptive word within it on its own.

Document the findings and any outstanding questions in a decision memo. If a significant conflict remains unresolved, consult a trade mark specialist before expanding. Changing the name of a single outlet is usually easier than doing so across a network of independent business owners.

3. Choose protection to suit the business

Applications for national trade mark registration in Finland are made to the Finnish Patent and Registration Office. Applications for a European Union trade mark are made to the European Union Intellectual Property Office, EUIPO, and its protection also covers Finland. Choose your application route according to your actual market and expansion plans, rather than simply seeking the broadest possible protection.

The list of goods and services specified in the application is crucial. Protection should match what franchisees offer under the mark. For example, plans to introduce an own-brand product range alongside a service business may require a separate assessment. Once an application has been filed, its list cannot be extended to include new goods or services.

Consider separately whether you need a word mark and a figurative mark. A word mark protects the name without tying it to a particular logo, whereas a figurative mark protects the overall design submitted in the application. The right approach depends on the identifier’s distinctiveness and how it will be used.

In Finland, trade mark rights can also arise through established use, but proving this may require substantial evidence. Registration provides a clearer basis for protection. Even so, distinguish between a pending application and a granted registration when describing your rights to prospective franchisees.

4. Agree precise terms of use

Franchising is a network of independent businesses using a shared concept on agreed terms. Finland has no separate franchising act, dedicated register of franchise networks or statutory franchise disclosure document. Ordinary company registration and trade mark registration are separate matters.

Trade mark protection is governed by the Finnish Trade Marks Act and, for EU trade marks, the EU Trade Mark Regulation. Relevant contract rules include the Finnish Contracts Act, the Finnish Competition Act and EU competition rules. Misleading business marketing is also assessed under the Finnish Unfair Business Practices Act. The Finnish Franchising Association’s code of ethics is self-regulation, not legislation.

The franchise agreement or an appendix should specify at least:

• the marks covered by the licence and their rights holders
• the permitted services, products, territories and channels of use
• the duration of the licence and its relationship to the term of the agreement
• the approval procedure for visual changes
• how infringements are to be reported and handled
• the requirement to stop using the identifiers when the agreement ends.

Also clarify whether payment for the licence is included in the franchise fee or charged separately. A general clause granting the right to use the brand does not resolve these practical questions.

5. Plan monitoring and exit arrangements in advance

Appoint someone within the network to monitor registrations, renewal requirements and the use of brand identifiers. Keep evidence of genuine use of the mark, such as dated marketing materials. Non-use of a registered mark may lead to the loss of rights under the conditions laid down by law.

Agree who controls domain names, social media accounts and local business profiles. When a franchisee changes, the network’s customer channels must not be left vulnerable to unclear ownership or missing access rights. Prepare an end-of-agreement checklist covering signage, uniforms, websites, advertisements and other materials bearing the identifiers.

The practical takeaway: establish your rights to the name, apply for appropriate protection and agree the terms of use before securing commitments from franchisees. This ensures that the shared brand is built on documented rights, not assumptions.