Protecting your brand before opening your first franchise outlet

Your business name is on the premises and customers recognise your logo. But that does not necessarily mean you can let franchisees use that name without risk. Once your existing business becomes a franchise network, independent business owners are investing in the same identity. A sound foundation of trade mark rights protects that shared investment and helps prevent friction within your franchise community.

1. Check what you actually own

Start by listing all the brand identifiers a franchisee will use: your business name, logo, any product names and a distinctive slogan. For each item, record who developed it, who owns the rights and which registration or agreement supports that ownership.

Distinguish between three things:

• Trade name: the name under which your business actually operates. In the Netherlands, protection arises through use and depends on factors including the likelihood of confusion, the business activities and the geographical area in which it operates.
• Trade mark: a sign that distinguishes your goods or services. Trade mark protection is generally obtained through registration for specified goods or services in a particular territory.
• Domain name: an internet address. Owning it does not automatically give you the right to use the name as a trade mark.

Registration with the Netherlands Chamber of Commerce (KVK) is therefore not a trade mark registration. Nor does paying a designer automatically mean that all copyright in the logo has been transferred to you. Check the design agreement and ensure any necessary transfer is recorded in writing.

Take particular care if your name or logo is held personally, by another company or in the name of a former business partner. The franchisor must be legally entitled to authorise its use.

2. Check availability before rolling out

Do not search only for identical names. Similar names or figurative marks can also cause problems when used for similar goods or services. Check the relevant trade mark registers, existing trade names and actual use online.

For protection in the Netherlands, a Benelux trade mark registration with the Benelux Office for Intellectual Property, usually known as BOIP, is a common route. This registration covers Belgium, the Netherlands and Luxembourg. An EU trade mark registered through EUIPO provides protection within the European Union. Choose the territory based on your concrete growth plans, not simply because wider coverage sounds attractive.

The specification of goods and services is just as important. Registration for a product does not automatically cover all the services your franchise outlets offer. Describe what your franchise business actually sells and what expansion is realistic. A name that is too descriptive may also lack the distinctiveness needed for registration as a trade mark.

Have a trade mark adviser assess any uncertainties before prospective franchisees invest. Filing an application does not guarantee registration or mean that earlier rights will not present an obstacle. Distinguish clearly between ‘applied for’ and ‘registered’ in your communications.

3. Set out the right to use the brand in your franchise agreement

The Dutch Franchise Act has been in force since 1 January 2021 and is incorporated into Book 7 of the Dutch Civil Code. The ordinary trade mark rules also continue to apply, including the Benelux Convention on Intellectual Property. A franchise agreement cannot make up for missing trade mark rights.

Specify in the agreement which trade marks and trade names the franchisee may use. Include registration numbers where available and describe the permitted uses, such as external signage, packaging, workwear, advertising and social media.

Also address:

• whether use is permitted only for the agreed outlet and activities;
• whether local domain names and accounts require prior approval;
• a prohibition on the franchisee independently registering identical or confusingly similar trade marks;
• who takes action in cases of suspected infringement and who bears which costs;
• when the right of use ends and what must then be removed.

If another company owns the trade mark, check that your licence allows you to grant rights of use to franchisees. Align the terms of the agreements too: do not promise a right of use that you cannot continue to provide.

4. Tell prospective franchisees about restrictions and risks

The Dutch Franchise Act requires franchisors to provide relevant information before the agreement is signed. An ongoing trade mark dispute, an uncertain application or a restricted licence may materially affect a prospective franchisee’s decision. Explain these issues clearly in the pre-contractual documents.

The legally required information must be provided at least four weeks before the franchise agreement is entered into. Make sure the trade mark schedule and any restrictions are available in good time. Do not present an unresolved rights issue as an administrative formality.

Also agree what will happen if a name or logo does have to change. Who will organise the replacement, and who will pay for signage, printed materials and digital updates? A general power to change the visual identity does not override statutory disclosure requirements or any applicable consent rules.

5. Make brand management an ongoing responsibility

Appoint one person to take responsibility for registrations, renewals, licences and reports of misuse. Keep supporting documents in a central location and regularly check that actual use still aligns with the registered trade marks and activities.

Give franchisees a simple way to report fake accounts, confusing names and unauthorised use of the logo. Do not allow them to make legal commitments or start proceedings on behalf of the franchise network on their own initiative.

Practical takeaway: only allow a franchisee to use your brand once ownership, availability and rights of use have been properly verified. Complete these checks before making joint investments in the name and visual identity.