Trade Mark Rights and Terms of Use to Check Before Joining a Franchise in Japan

The right to use a brand’s signage and name is a key part of the value of joining a franchise. Yet even when a name is well known, the authority under which your prospective franchisor permits its use is a separate question. Before joining a franchise network in Japan, investigate the trade mark rights and the scope of permitted use, and check that the agreement suits the way you intend to operate.

1. Check the brand name and the contracting party separately

Start by comparing the brand name in the recruitment materials, the party entering into the franchise agreement and the trade mark owner. They are not necessarily the same. A parent company may own the trade marks while another company recruits franchisees as the franchisor. Alternatively, the franchisor may be a company authorised by an overseas rights holder to develop the brand in Japan.

Different names do not, in themselves, mean that an agreement is improper. What matters is whether the party you are contracting with has the authority to permit franchisees to use the trade marks. An agreement allowing the franchisor itself to use a trade mark does not necessarily include the right to authorise franchisees to use it.

Ask the franchisor to provide the following information together:

• The names and logos to be used at the premises, and the trade mark registration number for each
• The name of the trade mark owner and its relationship with the party entering into the franchise agreement
• If the franchisor is not the owner, the basis on which it is authorised to license use to franchisees
• The territory, services and period covered by the permission

If you are told that the full agreement cannot be disclosed because it is confidential, discuss alternative evidence, such as extracts from the relevant provisions or a confirmation letter from the rights holder. Do not settle for a verbal assurance that “it is fine because we are part of the same group”.

2. Check the scope and status of the registration, not just whether it exists

In Japan, trade mark rights arise upon registration under the Trade Mark Act. However, registering a name does not give the owner the same scope of rights across all goods and services. You need to check both the registered mark and its designated goods and services.

You can search trade mark application and registration information on J-PlatPat, Japan’s patent information platform. Using the registration numbers supplied by the franchisor, cross-check the owner, the registered mark, the designated goods and services, and the status of the rights. Bear in mind that a word mark and a logo incorporating graphic elements may have separate registrations.

An application pending registration is not the same as a registered trade mark. Equally, failing to find a registration does not mean you can immediately assume the name is free to use. Using another party’s well-known or famous name or other identifying sign may also raise issues under the Unfair Competition Prevention Act.

For example, if you want to sell packaged food bearing the brand name as well as serving food on the premises, specify the products and sales methods you plan to use. Do not rely on search results alone to draw firm conclusions about the scope of rights or conflicts with other trade marks. Ask a Japanese patent attorney, or benrishi, to review any unresolved questions.

3. Confirm the permitted use in shops, online and in promotional materials

Even if the agreement says you may “use the trade mark”, uncertainty about where and in what form you may use it can cause misunderstandings during preparations for opening. Check the conditions for each intended use, including websites and local advertising as well as shop signs.

Use	What to check before joining
Signs, uniforms and packaging	Which logos may be used, permitted suppliers, and whether prior approval is required
Your outlet’s own website	Display of the brand name, domain registration, and review of website content
Social media and map services	Account names, whose name accounts must be registered in, and permitted content
Online retail and delivery services	Whether you may list your outlet, which product images you may use, and which products you may sell
Local advertising and joint promotions	Display alongside other names, alterations to logos, and approval procedures

Where approval is required, ask whom to apply to, what to submit, the usual response time and how to handle requests for revisions. If approval is refused after you have commissioned launch advertising, you could face wasted production costs or a delayed opening.

Permission to use a trade mark is also separate from permission to use photographs, illustrations, advertising copy and other materials. Even where the franchisor supplies the materials, check whether you may edit them or reproduce them in external media. Distinguish between promotional materials you create yourself and those using franchisor-specified assets, and list the terms of use and costs for each.

4. Link Japan’s disclosure rules to your trade mark checks

Under Article 11 of Japan’s Act on the Promotion of Small and Medium-sized Retail Business, franchisors operating a “specified chain business” as defined by the Act must provide prospective franchisees with written disclosure of prescribed matters and explain them before a contract is signed. The trade marks, trade names and other identifying signs to be used are among the matters covered by disclosure.

However, this obligation does not apply uniformly to every franchise agreement. Coverage depends on statutory requirements, including whether the business primarily serves small and medium-sized retailers and involves ongoing supply of goods, or arrangements for their supply, together with management guidance. A business is not necessarily covered simply because it is described as a restaurant.

Meanwhile, the Japan Fair Trade Commission’s guidelines on franchise systems under the Antimonopoly Act address franchise transactions beyond just retail and food service. Franchisees are businesses independent of the franchisor, and their dealings with it are subject to the Antimonopoly Act. These guidelines explain the application of that Act; they do not provide a guarantee of trade mark rights.

The presence of a brand name in a disclosure document is not the same as evidence that the franchisor has authority to license it. Cross-check the disclosure document, franchise agreement and trade mark materials. Ask for an explanation of any discrepancies in names, rights holders or periods of use. As contractual rights and obligations are also governed by the Civil Code and other laws, trade mark registration details alone are not enough to judge whether an agreement adequately protects you.

5. Agree what happens if you can no longer use the brand

Before joining, consider what would happen if you could not use the brand as planned. Check how franchisees are expected to respond if a third party alleges infringement or if the agreement between the franchisor and the trade mark owner ends.

Specifically, establish whom to contact in a dispute, who will handle negotiations, who will pay legal fees and other expenses, who will cover replacement signs and packaging, and what happens if trading has to stop. If the franchisor’s licence expires before your franchise agreement does, ask what basis there will be for continued use. A statement that renewal is planned is not a guarantee that use can continue.

The franchisor will not necessarily be required to bear every loss in these circumstances. Review the specific clauses with a lawyer, including whether you must continue trading under a different brand and what contractual options you have if the brand becomes unavailable. Keep the sales representative’s responses, but also ensure that important agreements are incorporated into the contract or a supplementary agreement.

The practical priority is to summarise on one page whose rights you may use, with whose permission, to what extent and for how long. Only proceed with orders for signage and advertising once you have confirmed that the rights granted cover your intended use.