Building a franchise: protect your brand before you launch

A successful business has a name its customers recognise. But that does not automatically mean the name can be used with legal certainty across a growing franchise network. Before recruiting partners and committing to investment in signage, premises fit-outs or advertising, establish who owns the trade mark, what it protects and whether you can grant the necessary rights to use it.

1. Take stock of existing brand identifiers and rights

Start with an inventory. List the business name, product names, logos and, where relevant, distinctive advertising slogans that the network will use. For each identifier, record who uses it, since when and on what legal basis.

In particular, check:

• Has a trade mark application been filed, or is the mark already registered?
• Who is listed as the owner: you personally, the operating company or another business?
• Which goods and services are protected?
• In which territory does the protection apply?
• Are there any licences, transfers, oppositions or other disputes?

An entry in the commercial register or a domain name is no substitute for a trade mark review. Business names and other commercial identifiers may enjoy protection in their own right, but its scope must be assessed separately. Trade mark protection can also arise through use where the statutory conditions are met. However, do not rely on this without checking if you want to plan your expansion with confidence.

Often, the founder still owns the trade mark personally, while a new company is intended to act as franchisor. This is not necessarily a problem. What matters is a sound chain of rights: the franchisor company must be legally entitled to authorise its partners to use the mark.

2. Assess the scope of protection and potential conflicts before filing

A trade mark review does not begin with filling in an application. The first questions are whether the proposed sign is eligible for protection and whether earlier rights could prevent its use or registration. Purely descriptive terms cannot simply be monopolised as trade marks.

Do not search only for identical names. Similar signs can also create conflicts where the goods or services concerned are sufficiently closely related. Alongside German trade marks, EU trade marks and international registrations covering Germany are particularly relevant. A professional similarity search helps you assess the risks.

Registration with the German Patent and Trade Mark Office does not mean that all earlier rights have been checked and ruled out as potential conflicts. Especially before expanding, do not assume that the authority has given the name comprehensive clearance.

Also decide what you want to protect. A word mark and a combined word-and-logo mark protect different subject matter. Choose a specification of goods and services that reflects your actual offering and specific planned extensions. An additional service category needed later cannot simply be added to an existing application.

3. Define the trade mark licence clearly in the franchise agreement

Germany has no dedicated franchise statute and no franchise-specific registration or approval procedure. Franchise relationships are governed in particular by the general contract law provisions of the German Civil Code (BGB), the rules on standard terms and conditions in sections 305 onwards of the BGB and, depending on the circumstances, commercial, competition and trade mark law. Section 30 of the German Trade Mark Act is particularly important for trade mark licensing.

Under this provision, a trade mark can, among other things, be licensed for all or some of the protected goods and services, on an exclusive or non-exclusive basis. Turn these options into a clear agreement:

• Subject of the licence: Which specifically identified trade marks may the partner use?
• Scope of use: Which services, locations and communication channels does the permission cover?
• Authorised users: May only the contracting partner use the mark? How will appointed advertising service providers be covered?
• Duration: How does the licence relate to the term of the agreement?
• Quality: What objectively justified requirements apply to goods and services offered under the mark?

Avoid contradictory commitments. A non-exclusive trade mark licence, for example, does not in itself determine whether the agreement grants territorial protection. These provisions must be consistent, but they remain legally distinct matters.

4. Make day-to-day brand use practical

Legal protection alone does not create a consistent brand presence across the network. Provide approved files and explain which versions may be used on signage, workwear, packaging and digital profiles.

A streamlined approval process should distinguish between unchanged standard uses and new designs. Partners should not have to resubmit every previously approved template. New name combinations, additional logos or altered claims about the offering, however, warrant a separate review.

Also specify who may register new domains and create social media accounts, and who manages the login details. This prevents important elements of the shared brand presence from becoming difficult to access later. The rules should protect the brand without obscuring the partners’ legal independence.

5. Manage trade mark rights on an ongoing basis

Appoint someone to take responsibility for register details, renewal deadlines and evidence of use. Registered trade marks must not only be renewed but, as a general rule, must also be put to genuine use to maintain their protection. Keep dated evidence such as advertising materials, product images and invoices.

Set up a reporting process for possible infringements. Partners should document potentially infringing signs and report them to head office rather than independently issuing formal legal warnings. The legal assessment and any subsequent action should be coordinated.

Practical takeaway: Authorise franchise use of the trade mark only once ownership, the scope of protection, potential conflicts and the authority to grant licences have been clearly established. An up-to-date overview of rights and clear rules on use provide a reliable foundation for your franchise network.