Registering a franchise agreement with IMPI: what to check in Mexico

When buying a franchise in Mexico, registering the trade mark and registering the franchise agreement are not the same thing. The former protects the distinctive sign; the latter allows the contractual relationship to have legal effect against third parties. Understanding this distinction helps franchise buyers avoid an omission that can easily fall between the franchisor’s responsibilities and their own.

1. Understand what registration achieves

Mexico has specific legislation governing franchises. Article 245 of the Federal Law on the Protection of Industrial Property (LFPPI) defines a franchise as involving a written licence to use a trade mark, accompanied by technical knowledge or assistance to ensure consistent operations. Article 246 requires the agreement to be in writing and sets out its minimum content.

Registration with the Mexican Institute of Industrial Property (IMPI) serves a different purpose: enabling the agreement to have legal effect against third parties. These are people or entities that are not parties to the agreement between the franchisor and franchisee.

It is worth separating two questions:

• What obligations have the parties undertaken? The answer lies in the agreement and the applicable legislation.
• How can that relationship be enforced against third parties? This is where registration with IMPI becomes important.

A failure to register should not be confused with the agreement automatically having no legal existence between its signatories. Nor should registration be assumed to guarantee commercial success or eliminate potential disputes. Its legal scope should be reviewed with a lawyer in light of the rights involved.

2. Do not confuse registration with approval to operate

The procedure does not amount to government certification of the franchise’s profitability, financial soundness or quality. A registered agreement does not demonstrate that its business projections are realistic or that the buyer can open without obtaining other permits.

Registering the agreement, registering the trade mark and obtaining the authorisations needed to operate the premises are also separate matters. An IMPI filing does not replace the tax, employment or municipal obligations applicable to the business.

Registration does not replace pre-contractual disclosure either. Article 245 of the LFPPI requires the franchisor to provide information about the state of its business at least thirty days before entering into the agreement. Simply submitting the agreement to the Institute afterwards does not fulfil this requirement.

If someone offers an “IMPI-approved franchise”, ask them to identify the document supporting that claim. A trade mark registration certificate, an acknowledgement of receipt of an application and a registration decision each establish different things.

3. Agree who will handle the process and what they will provide

Either party can apply for registration. However, this does not settle who will prepare the application file, respond to communications from the Institute or retain the documents. Before signing, allocate these tasks in writing.

The list of responsibilities should include:

• Person responsible: who will submit the application and who, if anyone, will act as their representative.
• Documentation: who will provide the signed agreement and documents establishing the representative’s authority.
• Costs: who will pay the official fee, professional fees and, where applicable, translation costs or costs associated with formalities for foreign documents.
• Follow-up: who will respond to requests from the Institute and notify the other party of any issues.
• Evidence provided: how the franchisee will receive the acknowledgement of receipt and the decision issued by IMPI.

Do not accept “the registration process is included” as a complete explanation. Ask for the official fee to be distinguished from professional service charges, and check the fee in force when the application is submitted.

4. Keep evidence and check the outcome

The application file normally requires the application form, proof of payment, the signed document setting out the franchise arrangement and, where applicable, evidence of the representative’s authority. Foreign documents may require translation, legalisation or an apostille, depending on the circumstances. Confirm the current requirements before gathering them.

An acknowledgement of receipt proves that the application was submitted, not that registration was successfully completed. Also request the decision and check that the parties’ details and the rights covered match the transaction you agreed to.

Keep a file containing the signed agreement, its annexes, the application, proof of payment, correspondence and the decision. If ownership of the rights subsequently changes or the contractual relationship is amended, seek advice on whether further action with the Institute is needed; do not assume the initial registration reflects all future changes.

Practical takeaway: before buying, agree who is responsible for registration, who will pay the costs and what evidence will be provided. Afterwards, check the outcome: a promise to handle the process is no substitute for an IMPI decision.