Trade marks in franchising: checks before building your network

A name that customers recognise is not automatically a trade mark ready to be licensed to franchisees. When turning an existing business into a franchise network, you need to check who owns the rights, what they protect and whether you can authorise others to use them. Doing this before offering franchises avoids passing on problems to future partners that may currently seem merely administrative.

1. Establish who owns the trade mark

Start with the documents, not the signage. The trade mark might be registered in the name of the founder, a previous company or someone other than the entity that will sign the franchise agreements. Even where the same people are involved, the companies remain separate legal entities.

Prepare a record covering:

• the name and representation of the trade mark;
• the owner listed in the registers;
• the application or registration number;
• the territories and goods or services covered;
• the application or registration status and relevant deadlines;
• any assignments, licences or disputes.

Anyone licensing the trade mark must hold the necessary rights. If the future franchisor does not own it, seek professional advice on whether an assignment is needed or a licence that expressly allows the franchisor to authorise franchisees to use it. A licence limited to direct use should not be treated as blanket permission to grant sublicences.

Also check the arrangements with whoever created the logo: paying for the design does not necessarily resolve every issue concerning rights in the creative material.

2. Check that the protection matches the business

Registering a company name or an internet domain is not the same as registering a trade mark. Nor does a registered trade mark provide blanket protection for every activity in every country.

Compare the protection available with what franchisees will actually offer. A business that began by selling products may have added services, training or own-brand goods. The goods and services covered by the original registration may no longer suit the current business model.

For Italy, checks may involve national trade marks, European Union trade marks and international registrations effective in the relevant territory. Consult the databases of the Italian Patent and Trade Mark Office (UIBM), the European Union Intellectual Property Office (EUIPO) and the World Intellectual Property Organization (WIPO), but do not assume that a search for an identical name is a sufficient clearance check.

Have similar signs and potential conflicts with earlier rights assessed too. Filing an application does not guarantee registration or freedom from challenges. Before commissioning signage and materials for multiple locations, clarify any risks and possible alternatives.

3. Link your checks to Italian franchise law

Franchising in Italy is governed by Law No. 129 of 6 May 2004. Trade marks are among the industrial or intellectual property rights that may form part of a franchise relationship, so managing them is not a separate detail outside the network development process.

Article 4 requires the franchisor to provide the prospective franchisee with a complete copy of the agreement and the documentation required by law at least thirty days before signing, subject to the specific exceptions provided for. The required attachments include information on the trade marks used: registration or application details, details of any licence granted to the franchisor by a third party, or documentation demonstrating actual use of the trade mark.

Do not therefore present a pending application as a registration already secured. The law allows for different situations, which must be described accurately.

Trade mark protection must also be assessed in light of the Italian Industrial Property Code, Legislative Decree No. 30 of 10 February 2005, and the rules applicable to the particular right relied upon. Contractual information must reflect the rights actually available, not those you hope to obtain.

4. Define how franchisees may use the trade mark

Once the rights are clear, establish how they may be exercised. Have the agreement specify which signs are licensed, for which activities, in which territory and for how long, ensuring these provisions are consistent with any underlying licence.

Distinguish, at a minimum, between use on signage, packaging, advertising, websites and social media profiles. Specify who may register domain names or set up local pages, and what authorisation they need. Prevent franchisees from independently applying to register a trade mark containing the network’s name.

Brand guidelines should make correct use straightforward: approved files, permitted variations and a procedure for requesting adaptations. Also set out how to report imitations and who handles disputes, without promising guaranteed outcomes in court.

5. Assign responsibility and monitor deadlines

Keep registrations, licences and correspondence in an up-to-date archive. Make someone responsible for monitoring renewals, changes of ownership and new protection needs. Review the position whenever you add products, change the logo or plan openings outside Italy.

Practical tip: before looking for franchisees, complete your trade mark record and have every link in the chain of rights checked. A shared commercial identity supports a franchise network only if each franchisee can use it on a clear legal footing.