Transferring a Trade Mark to the Company Before Granting Franchises in Lebanon

A business may start with a trade mark registered in its founder’s name, with a company later taking over operations and negotiating franchise agreements. This creates an important gap: the company promising franchisees the right to use the trade mark may not own it. Closing that gap involves more than changing a name on a certificate. It means putting ownership, authority and documentation in order to safeguard continuity across the franchise network. This guide focuses on transferring an existing trade mark from the founder to the company before granting franchises, rather than registering a new mark.

1. Establish the actual owner before choosing a transfer route

Start with the trade mark registration certificate and the records held by the Intellectual Property Protection Office at Lebanon’s Ministry of Economy and Trade. Compare the rights holder’s name with that of the company that will sign the franchise agreements. Do not rely solely on the name displayed on shopfronts or invoices. A similarity between the company name and the trade mark, or the fact that the founder owns the company, does not automatically make them the same owner.

Create a table listing every trade mark in use: the Arabic name, foreign-language name, logo, registration number, owner’s name, goods or services covered, and protection expiry date. This may reveal that the name is registered to the founder while the logo belongs to another partner, or that an application is still pending.

Also gather any previous agreements relating to the trade mark, including assignments, licences and settlements. The aim is to establish that the founder can transfer the rights in question and has not granted anyone else rights that conflict with expansion. If there is a dispute or a discrepancy in names, resolve the underlying issue before presenting the company’s ownership as settled.

2. Understand the difference between a transfer agreement and recording it for third-party purposes

Lebanon has no comprehensive franchise-specific law or general regime requiring a standardised franchise disclosure document. Depending on the subject matter, the relationship is governed by the Code of Obligations and Contracts, the Commercial Code, and rules on intellectual property, competition and consumer protection. Trade mark transfers are specifically governed by Decision No. 2385 of 17 January 1924 on commercial and industrial property rights, as amended.

Article 76 permits a filed trade mark to be transferred by sale or assignment, with or without payment, either together with the business or separately from it. It requires the competent authority to be notified of the transfer for it to be enforceable against third parties. Signing an agreement between the founder and their company should therefore not be treated as a substitute for updating ownership with the Office.

Distinguish between three stages: signing the transfer instrument, the date it takes effect between the parties, and completing the formalities needed to record it and make it enforceable against third parties. Ask your lawyer to identify the documents and procedures currently required, and obtain evidence that the process has been completed—not merely that an application has been submitted. Do not use historical fees quoted in old legislation to estimate today’s transaction costs.

3. Draft an agreement that transfers clearly identified rights

A statement that “the founder assigns the trade mark to the company” is not enough to address all the practical details. The agreement should identify the trade marks concerned, their registration numbers, their current owner and the recipient company, with copies of the marks and supporting particulars attached to avoid ambiguity.

Subject to legal and accounting review, the agreement should address:

• The nature of the transaction: a sale, an assignment without payment or another suitable arrangement, stating any consideration payable.
• The effective date, who bears the transaction costs, and who will manage the process through to completion.
• Any existing rights and licences that will remain in force, and any consents needed to carry out the transfer.
• Delivery of certificates, files and correspondence, and cooperation if further documents are requested.
• How to deal with any objection or missing information that prevents the ownership record from being updated.

If the founder also represents the company, check the internal approvals and authority needed to enter into the agreement. Do not assume that signing on both sides will always be sufficient. Equally, do not assume that the domain name, social media accounts or rights in the logo design transfer automatically with the trade mark. Address these assets through separate arrangements or clear contractual provisions suited to their nature.

4. Link completion of the transfer to the decision to grant franchises

Prepare a checklist before signing the first agreement in the company’s name. It should include the transfer agreement, the necessary internal approvals, evidence that the process has been followed through and completed with the competent authority, and an updated copy of the ownership particulars. Then review the definitions of “Trade Mark” and “Franchisor” in the franchise agreement to ensure they reflect the actual position.

If franchising is due to begin before the transfer is complete, do not describe the company as the owner without a proper basis. Discuss an explicit transitional arrangement with your lawyer that allows the company to use the trade mark and grant franchisees the right to use it within clearly defined limits. A licence allowing the company to operate the business does not necessarily authorise it to license the trade mark to others.

Appoint someone within the company to maintain the records and monitor renewals and subsequent changes. If franchise agreements have already been signed, examine how the transfer affects them and whether notices, consents or addenda are needed, rather than assuming that all contractual relationships transfer automatically.

Practical takeaway: Before granting franchises, ensure that trade mark ownership and the authority to grant rights to use it are aligned. Document the transfer, complete the formalities, and make sure the franchise agreement reflects the company’s actual rights—not merely the founder’s intention to transfer them.