Protect Your Brand Before Franchising Your Business

Before seeking your first franchisee, make sure you have the right to authorise others to use your business name and logo. Customer recognition or registration of the business name alone is not enough. In a franchise network, clear brand ownership is a foundation of trust: everyone should know what they may use, where and for how long.

1. Distinguish business name registration from trade mark rights

Registering a business name is not the same as registering a trade mark. Registration with the Department of Trade and Industry (DTI) for a sole proprietorship, or the Securities and Exchange Commission (SEC) for a corporation or partnership, does not replace trade mark registration with the Intellectual Property Office of the Philippines (IPOPHL).

Under Republic Act No. 8293, the Intellectual Property Code, trade mark rights are acquired through valid registration in accordance with the law. Separate protections also exist for business names and against unfair competition, but these do not remove the need to assess the trade mark itself.

Start by listing the brand identifiers you use:

• The name displayed on signs and packaging.
• The logo and its variations.
• Distinctive product or service names.
• Phrases you wish to protect as trade marks.

For each one, record who created it, who is understood to own it, and whether an application or certificate already exists. If an external designer created the logo, also have the copyright agreement reviewed. Paying for a design does not automatically settle every ownership issue.

2. Check for similarities, the scope of protection and the actual owner

Before spending money on signage for a new outlet, search IPOPHL’s trade mark records. Do not look only for identical spellings. Check for similarities in sound, appearance and meaning, especially for related goods or services.

A preliminary search is only a screening tool, not a guarantee that an application will be accepted or that no one else holds rights. If you find a close match, seek advice from a lawyer with intellectual property expertise before offering a franchise.

The scope of registration matters too. For example, do not assume that protection for restaurant services automatically covers every packaged food product you intend to sell. Align the listed goods and services with your current and planned use.

Also make sure the correct owner is named. If the founder owns the trade mark personally but a corporation will act as franchisor, there must be a clear legal basis for the corporation to authorise its use. This may require an assignment of rights or a licence that expressly permits sublicensing. Have the documentation and any applicable recordal requirements dealt with before signing agreements with franchise partners.

3. Set out the limits of permission to use the trade mark

The Philippines has no single comprehensive law covering all aspects of franchising. The Civil Code is important for contracts, while the Intellectual Property Code governs trade mark use and related rights.

Executive Order No. 169, issued in 2022, also sets specific rules for agreements involving micro, small and medium-sized enterprises. It prescribes minimum contractual provisions and directs the DTI to create a register of franchise agreements. Check the current applicable procedure with the DTI; do not confuse this with trade mark registration.

The trade mark section of the contract should clearly specify:

• The exact trade mark and permitted versions.
• The goods, services, locations and forms of use covered.
• Permission for use on signage, packaging, web pages and in delivery operations.
• Quality standards and inspection procedures.
• How imitation should be reported and who is responsible for enforcing rights.
• The requirement to stop using the trade mark when the agreement ends.

Actual quality control is essential: the Intellectual Property Code requires the trade mark licensor to exercise effective control over the quality of the relevant goods or services. Also have a legal adviser check whether rules on technology transfer and licence recordal apply.

4. Prepare supporting records and a maintenance calendar

Keep an organised file containing search results, applications, certificates, deeds of assignment, licences and evidence of use. Appoint someone to monitor renewals and required declarations of actual use. Do not rely solely on the owner’s memory.

If an application is still pending, make this clear to prospective franchise partners. Do not describe an unregistered trade mark as registered. Also agree what will happen if the brand needs to change: who will pay for new signage, packaging and customer notices?

Practical reminder: Before taking on your first franchise partner, make sure ownership is clear, the scope of protection has been checked, and permission to use the trade mark is set out in writing.