Franchising: checking who owns and licenses the trade mark

Joining a franchise network also means investing in brand recognition. But a familiar name does not, on its own, prove that the business you are dealing with can grant you the right to use it in Italy. Before committing, check who owns the trade mark, which activities it covers and what would happen if the right to use it were lost. These targeted checks help protect your signage, advertising materials and business continuity.

1. Start with the exact trade mark and its owner

Ask the franchisor to identify precisely the signs you will use: the name, any logo and any alternative versions. A word mark, which protects a verbal element, is not necessarily the same as a figurative mark incorporating graphic elements.

For each sign, request:

• the application or registration number;
• the current owner’s name;
• the territory in which it is protected;
• the goods and services listed in the registration;
• the filing, registration and expiry dates;
• details of any licences under which the franchisor uses it.

Compare this information with the name of the company that will sign the agreement. If the owner and the franchisor are different entities, this does not automatically mean there is a problem: the trade mark may belong to another company within the same organisation or be used under licence. However, you need to establish the legal basis on which the franchisor can grant franchisees the right to use it.

Do not treat an Italian company register extract, a domain name or a social media profile as sufficient evidence: these identify aspects of the business, but do not, by themselves, prove ownership of a registered trade mark.

2. Check the protection, territory and registration status

You can carry out an initial check using the databases of the Italian Patent and Trade Mark Office, the EUIPO for European Union trade marks, and WIPO for international registrations. International registrations do not automatically provide worldwide protection: you need to check the designated territories and the actual status of protection.

Check that the records match the information you have received, and distinguish between a filed application and a granted registration. An application does not provide the same certainty as a completed registration process and may face opposition or other obstacles.

Also check the specific list of goods and services. It is not enough for an apparently relevant class to appear: you need to read what is actually protected. If the proposed business includes sales, support and training, ask how the trade mark protection relates to each planned activity.

Your own search can help identify inconsistencies, but it cannot establish that there are no risks. If there have been transfers of ownership, disputes or similar signs, engage an industrial property adviser or a suitably qualified lawyer. Ask for an assessment focused on the trade mark, the Italian territory and its intended use at your outlet.

3. Use the information required under Italian law

In Italy, franchising is governed by Law No. 129 of 6 May 2004. Article 4 requires the franchisor to provide the prospective franchisee with a complete copy of the agreement and the required annexes at least thirty days before signing, subject to the exceptions for objective and specific confidentiality needs set out in the law.

The required information includes details of the trade marks used: registration or filing particulars, details of the licence granted to the franchisor by a third-party owner, or documentation demonstrating actual use of the trade mark.

This is important: the law also provides for situations other than direct ownership of a registered trade mark. Do not therefore treat a pending application, a licence or an unregistered trade mark as automatic proof of compliance or non-compliance. You need to understand the implications for your business, including under the Italian Industrial Property Code, Legislative Decree No. 30/2005.

Article 6 of Law No. 129/2004 also requires loyalty, fairness and good faith in negotiations. Submit specific written questions about any inconsistencies you find, and keep the replies. If false information comes to light, Article 8 provides, subject to the conditions referred to in that provision, for the possibility of seeking annulment of the agreement and damages. This is not, however, an automatic remedy.

4. Clarify what happens if the trade mark changes or is challenged

Your checks should extend to the practical consequences for your business. If the franchisor operates under a licence, ask for confirmation that it can authorise franchisees to use the trade mark and that the licence’s duration and terms are compatible with the proposed franchise relationship.

Then have the clauses reviewed that determine:

• which versions of the trade mark you may use and through which channels;
• who handles any third-party challenges;
• who pays the defence costs and the cost of any replacement signage;
• what happens if the franchisor’s licence ends;
• what remedies are available to you if you can no longer use the agreed sign.

Also consider a rebrand decided on by the network: signage, uniforms, packaging and local advertising may all require further spending. Ask who authorises these changes, who pays for them and how much notice is required. Do not assume that the initial franchise fee covers this work.

In practice: before signing, you should be able to establish a clear chain linking the trade mark you will display, its owner and the right you are being granted. If any link is missing, ask for clarification supported by documentation before investing.