Buying a Franchise in Lebanon: Check Trade Mark Rights Before Signing

You may choose a franchise for its familiar name and distinctive design, only to discover that the right to use them in Lebanon is unclear. Joining a franchise network does not mean buying ownership of the trade mark: it means obtaining a right to use it within the limits set by the contract. Before paying fees or commissioning signage, check exactly what rights you will receive, who has the authority to grant them, and what happens if another party challenges your use of them.

1. Distinguish company registration from trade mark protection

Lebanon has no comprehensive franchise-specific law, nor a dedicated national system for registering franchise agreements or a statutory disclosure document specifically required for them. The relationship is governed primarily by the Code of Obligations and Contracts, the Commercial Code and other relevant general rules. Trade mark protection is governed by commercial and industrial property rules, including Decision No. 2385 of 1924, as amended. Ask a Lebanese lawyer to verify the legislation currently in force and how it applies to the trade mark in question.

Registering the operating company or its name in the commercial register does not replace checks on trade mark rights. Equally, a foreign registration certificate alone does not establish protection in Lebanon. You need to verify the mark’s local status with the Intellectual Property Protection Office at the Ministry of Economy and Trade, and the scope of protection available for your intended business activities.

Do not assume that a well-known name is free from disputes. A trade mark may be used in other markets, while a similar name or a claim to earlier rights emerges in Lebanon. Legal checks should come before you commit to fitting out the premises, not after rebranding has become expensive.

2. Request evidence of rights and the licensing chain

Request a dedicated trade mark file, separate from the commercial proposal and sales forecasts. It should allow your lawyer to match the documents to the name and logo customers will actually see, rather than merely to a similar mark.

Depending on the circumstances, the file should include:

• Filing or registration documents in Lebanon, showing the current status and relevant dates.
• The rights holder’s name and address, and any documents establishing a transfer of ownership or change of name.
• Images of the marks covered, including the Arabic version if the outlet will use it.
• A statement of the goods and services covered by the protection and how they relate to the outlet’s activities.
• Licensing documents authorising the franchisor to grant you usage rights if it is not the owner.
• Written information about existing or reported objections, claims and disputes.

If the trade mark belongs to one company within a group but another entity signs the agreement, similar company names or common ownership are not enough. Request evidence that the contracting entity is authorised to grant the licence in Lebanon, showing its duration, limits and any authority to grant rights to third parties.

Also check that the rights remain valid for the full term of your agreement. If the licence on which the franchisor relies expires before your contract ends, ask how it will ensure your continued use of the trade mark. Do not treat a verbal promise of renewal as a substitute for addressing this risk in writing.

3. Turn your findings into contractual commitments

Once the documents have been checked, attach a schedule to the agreement identifying the licensed trade marks, their images, their owner and their permitted uses. Clarify whether the licence covers signage, packaging, advertising, digital accounts and sales through delivery channels, rather than relying on a general reference to using the ‘network’s brand identity’.

Request a clear contractual representation that the franchisor has the authority to grant the specified rights, together with disclosure of known restrictions and disputes. Also discuss its obligation to maintain the relevant rights, complete any necessary procedures and notify you of anything that could materially affect your ability to use the trade mark.

If the protection process is incomplete, do not assume that filing an application means securing final protection free from objections. Obtain an independent risk assessment, then negotiate terms making payments or the start of non-recoverable expenditure conditional on specific requirements being met. Set a clear deadline and specify what happens to any sums paid if those requirements are not met.

These are negotiated safeguards that need to be written into the agreement, not automatic refund rights that arise simply from buying a franchise. Review any clause excluding the franchisor’s liability for trade mark rights, particularly if access to those rights is the main reason for the fees you are paying.

4. Allocate the costs of challenges or loss of usage rights

Test the agreement with a practical question: what happens if the outlet receives a formal demand to stop using the name? Specify whom you must notify, who selects the lawyer, who manages and pays for the defence, and when a settlement requires your consent. Do not accept sole responsibility for defending rights you neither own nor control the supporting documentation for.

Discuss separately what happens to fees while use of the mark is disrupted, and who pays to replace signage, packaging and promotional materials if rebranding becomes necessary. Also specify how branded stock will be handled, which expenses require supporting evidence, and the limits and exclusions that apply to compensation.

Distinguish between a claim arising from the rights licensed by the franchisor and one caused by a change you made without its approval. If lawful use cannot continue, seek a specific remedy and a deadline for implementing it, followed by an appropriate contractual right to terminate and settle the financial position if the remedy fails. Do not assume that compensation is guaranteed in every case.

Practical takeaway: Do not pay for the name before checking its protection and the authority to license it in Lebanon. Gather the rights documentation, have it independently reviewed, and state in the agreement who handles the defence and bears the costs if the trade mark can no longer be used.