Protecting your franchise brand before opening your first outlet

An existing business name is not automatically ready for franchising. Once independent business owners start trading under your name, ownership, protection and usage rights must be clear. Within a franchise network, the brand is a shared promise to customers. This approach helps prevent your first franchisee from investing in a name that you cannot adequately protect or legally authorise them to use.

1. Check what you own and what is actually protected

Start by taking stock of your business name, logo, product names, domain names and social media accounts. Record the owner or account holder for each. In an established business, some rights may still belong to the founder personally, a former company or a design agency.

Distinguish between three things:

• Trade name: the name under which your business actually trades. In the Netherlands, protection arises through use and depends on factors including the likelihood of confusion, the nature of the businesses and the areas in which they operate.
• Trade mark: a sign that distinguishes your products or services. Registration with the Benelux Office for Intellectual Property (BOIP) is the standard route to trade mark protection in the Benelux region.
• Domain name: an internet address. Registering one does not, in itself, give you trade mark rights.

Registration with the Netherlands Chamber of Commerce (KVK) is therefore no substitute for trade mark registration. Nor does using your name for many years mean you can expand into other locations without facing objections.

Also check the copyright in your logo. Paying a design invoice does not automatically transfer copyright. Check whether your agreements permit alterations, reproduction and use by franchisees. Put any missing rights in place in writing; under Dutch law, a copyright assignment requires a deed.

2. Research the name before promising expansion

Search trade mark registers for both identical and similar names. Look beyond spelling to sound, meaning and the products or services covered by earlier registrations. Also investigate existing trade names and actual use in the market.

An available domain name or a search that returns no results is not sufficient evidence that a trade mark is available. If in doubt, ask a trade mark attorney to assess whether your name conflicts with earlier rights.

Next, decide what you want to register. A word mark protects the name itself; a figurative mark covers the registered visual design. A distinctive logo does not automatically make a descriptive business name a strong word mark. For a franchise concept known primarily by its name, that distinction can matter.

Choose the specification of goods and services based on what the franchise actually offers and its concrete expansion plans. Registering only physical products does not automatically cover all services associated with those products.

For a launch in the Netherlands, a Benelux trade mark is often a logical option. An EU trade mark registered through EUIPO may be relevant if you plan to expand across Europe. Do not choose solely on geographical coverage: also investigate potential conflicts and whether that broader protection is necessary.

3. Put a robust licence in place

The party entering into franchise agreements must have the authority to permit use of the trade mark. Is the trade mark registered in the name of another group company? If so, document the franchisor’s right to grant licences to franchisees. Also check the term, termination provisions and consequences of a sale or restructuring.

Then set out the following in the franchise agreement:

• Which trade marks and artwork files the franchisee may use.
• The activities, locations and communication channels for which that use is permitted.
• Whether local websites, advertising and social media require prior approval.
• Who takes action against counterfeiting, confusingly similar names or unauthorised use.
• What happens to external signage, accounts, domain names and remaining packaging when the franchisee leaves.

Distinguish between legal permission and day-to-day implementation. The agreement governs the right to use the brand; practical brand guidelines can sit in an appendix. Make sure the two are consistent.

For example, have local accounts created through a standard procedure, with clear arrangements for management and handover. This prevents a departing franchisee from holding the only password to an account that customers associate with the entire network.

4. Check your brand arrangements against the Dutch Franchise Act

The Netherlands has specific franchise legislation: the Dutch Franchise Act (Wet franchise), incorporated into Book 7 of the Dutch Civil Code, Articles 7:911 to 7:922. Trade mark rights do not override these rules.

The prospective franchisee must receive the required information, including the draft agreement and its appendices, in good time. Information covered by the statutory disclosure requirements must be provided at least four weeks before the franchise agreement is concluded. Make sure the brand licence and relevant restrictions are therefore included in the draft documents, rather than introduced only at opening.

Think ahead, too. A new visual identity may require investment in signage, clothing and interiors. Where the statutory conditions apply, prior consent may be required for changes to the franchise concept with financial consequences above the agreed thresholds. A general right to change the brand therefore does not give you unlimited scope to pass on costs.

Practical conclusion: before signing your first franchise agreement, complete three checks: whether the trade mark is available, whether you can demonstrate authority to permit its use, and whether the terms governing that use are workable. This gives your franchise network a solid starting point.