Check Your Trade Marks Before Franchising in New Zealand

Your established business may have a recognisable name, but that does not automatically mean you can safely license it to franchisees. Before expanding your franchise community, check whether you own the brand, whether it is adequately protected and whether another business could challenge its use. Resolving these questions early can prevent expensive changes to signage, websites and franchise documents later.

1. Identify the brand assets you will license

Start with an inventory of what customers actually recognise: your trading name, logo, product names, slogans and any distinctive branding used across your premises, packaging or vehicles. Separate essential brand assets from occasional campaign material.

For each essential asset, record:

• Who created it and who currently owns it.
• Whether a New Zealand trade mark application or registration exists.
• Which goods or services the registration covers.
• Any existing licences, restrictions or disputes.
• Where ownership records and supporting agreements are stored.

Do not assume that paying a designer settles every ownership question. Check the design contract and obtain advice on any gaps in copyright ownership or permissions. Similarly, a name used by your operating company might be registered as a trade mark in a founder’s personal name or held by another company.

The practical test is simple: can the proposed franchisor demonstrate its authority to let independent businesses use every essential part of the brand?

2. Check availability and registration coverage

The Trade Marks Act 2002 governs registered trade mark protection in New Zealand. Applications are handled by the Intellectual Property Office of New Zealand, commonly known as IPONZ. Registration protects a mark in relation to specified goods or services; it is not blanket ownership of a word for every commercial purpose.

Company name registration and ownership of a domain name are not substitutes for trade mark registration. Nor does years of local trading guarantee that expansion under the same name will be unchallenged.

Arrange a clearance review before committing franchisees to branded premises or equipment. This should consider similar marks, not just identical names, and relevant marketplace use. Unregistered brands may also have protection through passing off and the Fair Trading Act 1986.

Ask a trade mark adviser whether your existing protection matches the proposed franchise offering. A business that began selling products but now also offers installation, maintenance or training may need different coverage. A logo registration may not provide the same protection as a registration for the name itself.

Treat pending applications honestly: an application is not a granted registration, and acceptance is not guaranteed.

3. Confirm the franchisor has licensing authority

Once ownership is clear, map how permission will flow from the trade mark owner to each franchisee.

If the franchisor owns the marks directly, the franchise agreement should grant an appropriately defined licence. If a founder or separate company owns them, a written licence to the franchisor should expressly support the intended franchise arrangements, including any necessary sublicensing rights.

Ask your lawyer to check that the underlying permission remains workable throughout franchise terms and anticipated renewals. Consider what happens if the brand owner changes, the underlying licence ends or the franchisor is sold. Franchisees should not discover that their right to use the brand depends on an informal understanding.

This is not a reason to adopt a complicated ownership structure. It is a reason to make the actual structure legally coherent before recruiting.

4. Translate protection into practical brand rules

Registration alone does not manage everyday use. Prepare a concise brand-use schedule that your lawyer can align with the franchise agreement.

Specify approved versions of marks, permitted uses and the approval process for local advertising. Address domain names, social media accounts, vehicle graphics and business listings. Decide who registers and controls these assets, and how access will be transferred when a franchise ends.

Set out how franchisees should report suspected copying or infringement. They should not make legal threats or negotiate settlements on the brand owner’s behalf without authority.

Also establish a process for replacing outdated artwork. Clear instructions and accessible approved files make consistent use easier than relying on broad contractual prohibitions alone.

5. Check legal statements before recruitment

New Zealand has no franchise-specific legislation or government franchise registration system. General laws apply, including the Trade Marks Act 2002, the Fair Trading Act 1986 and contract law. The Franchise Association of New Zealand’s Code of Practice and Ethics also binds its members; membership is voluntary.

Under the Fair Trading Act, recruitment statements must not be misleading or unsubstantiated. Check claims such as “registered brand”, “exclusive rights” or “protected throughout New Zealand” against the actual legal position. Explain material ownership restrictions, pending applications or disputes accurately, with legal advice where needed.

Practical takeaway: Before offering your first franchise, assemble an ownership record, obtain a clearance and coverage review, and have your lawyer confirm the licensing chain. Only then promise franchisees the brand rights you can genuinely deliver.