Trade Marks for Franchises: What to Check Before You Start Selling

A successful outlet may operate for years under a name that is not fully protected by law. When you sell a franchise, that gap also affects your partners: they invest in signage, advertising and fitting out premises. Before entering the franchise market, business owners should therefore carry out a separate trade mark review. Its purpose is to confirm that a partner can genuinely be granted the right to use the intended brand for the intended business activities.

1. Distinguish the trade mark from other business identifiers

The name of a Russian limited liability company (OOO), a domain name, a social media account and a logo on a sign do not, by themselves, establish an exclusive right to a trade mark. Start with a simple inventory: which words, images and combinations of elements do customers see at your outlet, on your packaging, on your website and in your advertising?

Then compare that inventory with your registered marks. For each identifier, record:

• the registration number and a representation of the mark;
• the rights holder;
• the expiry date of the exclusive right;
• the goods and services covered by the protection;
• how it is actually used in the business.

In Russia, commercial concession arrangements—the legal framework used for franchising—are governed by Chapter 54 of the Russian Civil Code. Under Article 1027, the bundle of exclusive rights granted includes the right to a trade mark or service mark. Protection of the marks themselves is governed by Part Four of the Civil Code, primarily Chapter 76.

A filed application is not yet a registered trade mark. Do not present an application to a prospective franchisee as an established right. A licence agreement covering other assets, such as training materials, does not create protection for an unregistered name either.

2. Check who is entitled to grant rights to the brand

A common organisational problem is that one company operates the outlets, the founder owns the mark, and a newly formed company plans to sell the franchise. Having the same owners or director does not make these parties legally interchangeable. The prospective franchisor must have a legal basis for granting the relevant rights to partners.

Obtain up-to-date information from the register maintained by Rospatent, Russia’s intellectual property office, and compare it with the proposed rights holder’s documents. Check not only the individual’s or company’s name, but also the history of transfers of the right, registered encumbrances and current contractual restrictions.

If another party owns the mark, agree the legal structure with a lawyer in advance. This may involve an assignment of the exclusive right, or a grant of the right to use the mark with appropriate authority to grant rights onwards. A standard licence does not automatically permit sublicensing or sub-concession agreements.

Record the findings in a short report: who owns the mark, who will sign the agreement with the franchisee, and on what legal basis. Attach supporting documents. If the chain of rights is not yet in place, appoint someone to resolve the issue and set a deadline before making promises to prospective franchisees.

3. Match the protection to the partner’s activities

A registration certificate does not protect a name for every kind of goods and services. What matters is the specific list included in the registration. Class numbers under the International Classification of Goods and Services, also known as the Nice Classification, provide a useful guide, but they are no substitute for reading the wording within each class.

For example, a coffee shop owner may have a mark registered for food and drink services. If the franchisee will also sell packaged coffee under the same brand, protection for that product needs to be assessed separately. You cannot automatically assume that a registration covering service to customers also covers every product on the shelf.

Create a table with three columns:

• what the partner will do under the brand;
• which entry in the registered list covers that activity;
• what action is needed if a gap is found.

Assess the appearance of the mark too. If the registration covers a combined word-and-image mark, but partners are expected to use only the word or a substantially redesigned logo, the scope of protection needs a separate review. Do not promise identical protection for every design variation.

It is also worth asking a trade mark attorney to search for similar marks and assess the risk of claims. This is particularly important before seeking protection for additional goods and services: an existing registration does not guarantee that further protection can be secured without difficulty.

4. Check the protection period and evidence of use

Under Article 1491 of the Russian Civil Code, the exclusive right to a trade mark lasts for ten years from the application filing date. It can be renewed repeatedly for further ten-year periods. A franchise network needs not only a registration that is valid today, but also a clear process for maintaining it.

Appoint a member of staff to monitor deadlines, arrange renewals and retain supporting records. The agreement with the partner should require the rights holder to maintain protection and set out how the partner will be notified of circumstances that threaten use of the brand.

Separately, collect evidence of use: contracts, sales records, packaging samples and dated advertising materials. Article 1486 of the Russian Civil Code allows protection to be terminated early if the mark has not been used for a continuous period of three years. Photographs of signage are useful, but do not always demonstrate use across the full list of registered goods and services.

5. Make the review a condition of launching the franchise

Conclude the audit with a list of approved brand identifiers and permitted uses. Share it with the lawyer, designer and member of staff preparing the offer for prospective franchisees. The registration number, representation of the mark and list of permitted goods and services must be consistent across the documents.

Do not confuse registration of the mark with registration of the grant of rights under the agreement. Under Article 1028 of the Russian Civil Code, the grant of the right to use a bundle of exclusive rights under a commercial concession agreement must be registered with Rospatent. Without that registration, the grant is deemed not to have taken effect. Holding a trade mark certificate does not replace this procedure.

Practical takeaway: before selling a franchise, compile a brand dossier containing up-to-date register information, evidence of the franchisor’s authority, a comparison of the protection with the outlet’s activities, and a renewal schedule. If any element remains unverified, resolve the gap first—and only then promise a partner that they can operate under a protected name.