Launching a franchise: software and content licensing

When turning an established business into a franchise network, it is easy to assume that new franchisees can use your tried-and-tested software, product photos and training videos. Yet an independent franchisee is not necessarily entitled to use everything your own company uses lawfully. Before the first franchisee joins, check which assets you can provide, on what terms, and where a new licence or subscription is needed.

1. List the assets your franchisees will need

Look beyond the brand name and operational know-how. Work through a prospective franchisee’s typical day: which system will they use to take orders, which images will appear in their advertising, where will they download forms, and which videos will train their staff? Include every asset needed to operate and present the business as intended.

Typical items to check include:

• point-of-sale, appointment booking, stock management and customer relationship management software;
• website platforms, plug-ins, fonts and graphic templates;
• product photos, promotional videos, illustrations and written content;
• training materials produced by external specialists;
• bespoke software, calculation tools and digital forms.

For each item, record the rights holder, the current contracting party, the permitted uses and the location of the supporting documentation. Flag any item for which you have an invoice but cannot find the licence terms. Payment alone does not establish an unrestricted right to pass an asset on to others.

The practical aim of this inventory is not to collect every document, but to establish what an independent franchisee can lawfully use from their first day of trading.

2. Understand the Hungarian legal framework

Franchising in Hungary is not an unregulated form of business co-operation. Sections 6:376–6:381 of Act V of 2013 on the Civil Code expressly recognise franchise agreements. A central element is the grant of rights to use or exploit copyright, industrial property rights and protected know-how. The franchisor must also ensure that the necessary rights can be exercised continuously and without disruption.

For software, photographs and other copyright works, Act LXXVI of 1999 on Copyright is also fundamental. As a general rule, licence agreements must be in writing. A licensee may generally assign their licence or grant a sublicence only with the author’s express permission. Each agreement needs to be examined individually, taking account of the particular asset concerned.

There is no general regulatory registration requirement specifically for franchise systems, nor a standard mandatory disclosure form. Nevertheless, the Civil Code’s duties to co-operate and provide information still apply. The European Code of Ethics for Franchising is a self-regulatory standard, not legislation, and cannot make up for missing copyright permissions.

3. Distinguish your own use from franchisee use

A common misconception is that the franchisor’s subscription automatically covers every member of the franchise network. A multi-user package may, however, be restricted to staff within the same business. A franchisee is a separate business: their access may require a new subscription or specific permission from the provider.

Choose one of the following arrangements for each item:

• Central licence: the provider expressly permits independent franchisees to be included.
• Direct franchisee agreement: each franchisee contracts directly with the provider, while the franchisor specifies the necessary technical requirements.
• Sublicence: the franchisor has a documented right to authorise the franchisee to use the content.

For example, a photographer may have licensed their images for use on your own business’s website. This does not automatically mean that franchisees can use them on social media or printed leaflets. Check the permitted uses, duration, territory, and rights to modify and sublicense the images.

Give each item a clear status in your internal records: cleared for franchisee use, requires separate permission, or needs replacing.

4. Resolve gaps before making an offer to franchisees

Do not try to remedy missing permissions with a general clause in the franchise agreement. A promise to a franchisee does not extend the franchisor’s underlying licence. First, agree the necessary terms with the original rights holder or provider.

Provide a precise description of the intended arrangement: explain that independent businesses will use the asset, on which platforms, with how many user accounts and with what changes to the content. Obtain written confirmation or an amendment to the agreement. If this is not possible, find an alternative before presenting the asset as part of the franchise package.

Clarify who bears the costs, too: who pays for the basic package, additional users, updates and any migration? This is not simply a question of fees: unexpected access restrictions on essential software can disrupt day-to-day operations.

5. Assign responsibility for monitoring permissions

Checking licences and permissions is not a one-off launch task. Subscriptions expire, provider terms can change, and new content is added to shared storage. Appoint someone to monitor expiry dates, retain permissions and check new materials before publication.

The asset list given to franchisees should explain where to access each item, what they may use it for, whether they may modify it and whom to contact for help. Do not leave content available to download once permission to use it has expired or ended.

Practical takeaway: only promise your first franchisee digital assets or content where documentation confirms that their intended use is permitted. Resolve any uncertainty, find a replacement or remove the item from your offer first.