Buying a Franchise in Lebanon: Checking Trade Mark Ownership and Usage Rights

You might choose a well-known brand and find suitable premises, only to discover that the business selling you the franchise has no authority to let you use the name in Lebanon. Global recognition is not sufficient evidence of local rights, and the existence of other outlets does not settle the question. A sound franchise investment starts with checking three links in the chain: the trade mark owner, the party authorised to license it, and the company you will sign with. This guide explains how to verify that chain and protect the money you spend in reliance on it.

1. Understand the legal protection you are buying

Lebanon has no comprehensive law specifically governing franchise agreements, nor a franchise-specific mandatory disclosure regime of the kind found in some countries. The relationship is subject to general rules, including the Code of Obligations and Contracts and the Commercial Code. Intellectual property rules apply to the trade mark and protected materials that the agreement allows you to use. The absence of franchise-specific legislation does not mean there are no obligations, or that a franchisor is free to grant rights it does not hold.

Trade mark protection in Lebanon is based on Decision No. 2385 of 17 January 1924, as amended, concerning commercial and industrial property. The Intellectual Property Protection Office at the Ministry of Economy and Trade handles trade mark matters. Registering a company or trade name in the Commercial Register is no substitute for checking the trade mark’s status with the competent authority.

Nor should you assume that every franchise agreement automatically falls under Legislative Decree No. 34 of 1967 on commercial representation. Whether it applies depends on the substance and legal classification of the relationship, and remains a matter of legal and judicial debate. Ask a Lebanese lawyer to identify the rules applicable to your project rather than relying on the agreement’s title.

2. Check that the registered trade mark covers your actual business

Request local registration documents, renewal details and records of any changes to the owner’s name or transfers of ownership. Then instruct a specialist to verify the current position: a copy of an old certificate alone will not reveal whether rights have since been transferred or a dispute has arisen.

The review should address the following questions:

• Who is the owner? Check the owner’s legal name against its documentation, rather than relying solely on the group’s trading identity.
• What trade mark is protected? Check the name, logo and Arabic version, if you intend to use it. Do not assume that registering one automatically protects the others.
• Which goods and services are covered? Make sure the coverage matches your planned activities. Selling products and providing services may require checks across different categories.
• What is the status of the protection? Verify registration, renewals and any disputes or restrictions that could affect use.

If registration is pending, do not treat the application as a completed registration. Request a written risk assessment and specify in the contract what will happen if the necessary protection cannot be secured. Do not spend money on permanent signage or a major launch campaign before understanding that risk.

3. Trace the licensing chain through to the company signing your agreement

The trade mark owner may be a foreign company, while your agreement is with a regional master franchisee. That arrangement is not a problem in itself. The problem arises when the intermediary’s authority is narrower than the rights it promises you.

Ask for evidence that its agreement with the owner permits it to grant sub-franchises in Lebanon. Where commercial confidentiality is a concern, certified extracts or direct confirmation from the owner may be provided, as long as they clearly establish the scope, duration and restrictions of the authorisation. A general letter describing the business as an ‘authorised partner’ is not enough.

Compare the duration of the franchisor’s rights with the term of your agreement, and check whether the owner’s approval is required for your particular outlet. Also verify the signatory’s authority using company documents and the appropriate authorisations.

Ask explicitly: what happens to your right to use the trade mark if the agreement between the owner and the franchisor ends? Do not assume that your agreement will automatically continue. Where possible, discuss a direct arrangement with the owner or an agreed transition mechanism, rather than leaving your outlet’s future dependent on a relationship you cannot control.

4. Turn the findings into enforceable contract terms

The documents should not simply sit in a file separate from the agreement. Seek clear representations from the franchisor about its ownership or licensing authority, the existence of the rights needed for the agreed activities, and disclosure of known disputes that could affect their use.

Set out in a schedule exactly what you may use: the name, logo, designs, images and advertising materials. Also address domain names, social media accounts and delivery-app pages: who creates them, who manages them, and in whose name are they registered? Ownership of the trade mark does not, by itself, settle ownership of every piece of content or account.

Negotiate a procedure for handling third-party claims: the notification deadline, who conducts the defence, and who pays the costs and compensation under the agreed allocation of responsibility. If rebranding becomes necessary because of a defect in the franchisor’s rights, specify who pays for signage, packaging, system changes and marketing. These are contractual protections that require negotiation, not automatic legal guarantees.

5. Make spending conditional on resolving the key risks

Prepare a checklist for your lawyer to review before you approve spending on visual branding: the trade mark’s status, authority to grant sub-licences, required approvals and contractual remedies. If a crucial document is still missing, discuss putting the related financial commitment on hold until it is supplied, with clear terms addressing delays or an inability to meet the requirement.

The practical takeaway: Do not buy the right to use a name on the strength of its reputation alone. Verify local protection and the chain of authorisation, then make sure the agreement states who bears the consequences of any defect before the brand becomes signage, fittings and expenditure that may be difficult to recover.