Registering Franchise Rights with Rospatent: A Step-by-Step Guide

Signing an agreement and receiving the initial franchise fee does not mean that the grant of franchise rights has been fully formalised. An established business owner starting to build a franchise network needs a separate registration process, with a designated person responsible, a set of documents and a check of the outcome. This guide explains the process for a commercial concession agreement — the legal framework used for franchising in Russia — from preparing the transaction to confirming the grant of rights to the franchisee.

What is registered and why it matters

In Russia, commercial concessions are specifically governed by Chapter 54 of the Russian Civil Code. Under Article 1027, the rights holder grants the user, in return for payment, the right to use a bundle of exclusive rights in their business activities. This bundle must include rights to a trade mark or service mark. Registering the mark itself and registering the grant of rights to a particular franchisee are therefore separate procedures.

Article 1028 of the Russian Civil Code sets out two distinct requirements. The agreement must be in writing: failure to meet this requirement makes it invalid. The grant of the right to use the bundle of exclusive rights must be registered with Rospatent, Russia’s intellectual property office. Without registration, the grant of rights is deemed not to have taken effect.

This distinction matters both in negotiations and for internal record-keeping. It is incorrect to assume that the entire signed agreement is automatically invalid simply because registration is missing. Equally, it is risky to assume that the parties’ signatures or a signed record confirming the handover of manuals can replace registration. The consequences for payments and other obligations must be assessed in light of the agreement and how it has been performed.

Registration should not be seen as government approval of the franchise. Rospatent does not verify an outlet’s payback period, the quality of training or the reliability of the financial model. It formalises the grant of rights; the parties remain responsible for their commercial promises.

How to allocate responsibilities before signing

Under Article 1031 of the Russian Civil Code, the rights holder must arrange state registration unless the agreement provides otherwise. This responsibility can be assigned to the franchisee, but the network owner still needs to monitor the outcome: delays affect the use of its brand.

Rather than using a general phrase such as ‘the parties shall arrange registration’, set out a specific procedure covering:

• who prepares the application and checks the supporting documents;
• who signs and files the documents, and whether a representative is needed;
• who pays official fees and the fees of any external advisers;
• the deadline for filing after the agreement is signed;
• who receives and responds to requests from Rospatent;
• how the franchisee receives confirmation of filing and the registration outcome.

Set a separate deadline for the other party to provide missing information or correct documents. Otherwise, the party responsible for filing will depend on its partner’s cooperation without a contractual mechanism to address delays.

Distinguish between deadlines for the parties’ actions and the authority’s processing time. A franchisor can undertake to file a complete and accurate set of documents by a particular date, but should not unconditionally promise that the state registration process will be completed before opening. Build time into the launch schedule for queries and corrections, and check current processing times and fees before filing.

How to prepare the documents and monitor filing

Start with a single transaction record. Include details of the rights holder and the user, the agreement particulars, trade mark registration numbers, the duration of the grant of rights and any other terms needed for the application. This helps prevent discrepancies between the agreement, its schedules and the application.

Cross-check information not only across the documents but also against current official registers. Pay particular attention to the parties’ names, the rights holder’s details and the list of marks. If the agreement covers several marks, make sure the grant of rights is not inadvertently registered for only one of them.

The evidence needed to confirm the grant of rights depends on how the application is filed and signed. Where the rules allow, this may be the agreement, a notarised extract from it or a notice signed by both parties confirming that the rights have been granted. It is advisable to agree the document package with an intellectual property specialist: there is usually no need to submit all internal manuals and financial calculations to the authority.

After filing, retain the submission confirmation and application reference number. Appoint a member of staff to monitor incoming notices rather than simply waiting for an update from the franchisee. Any request should reach both the responsible lawyer and the launch manager, as corrections may affect the opening schedule.

How to coordinate registration, launch and payments

In the launch plan, distinguish between preparatory work and use of the rights being granted. Finding premises, preparing a budget and agreeing equipment requirements are not the same as starting to trade under the trade mark. Signage, branded advertising and sales under the brand need particular attention: filing an application does not, in itself, replace registration of the grant of rights.

The agreement should specify which activities take place before registration, when use of the bundle of rights begins and which events trigger payments. Do not assume that royalty payments are automatically deferred. If the initial franchise fee is paid in advance, address the consequences of delay or refusal: how the underlying issues will be resolved, the maximum waiting period, grounds for ending the relationship and how payments between the parties will be settled.

After registration, check not only that a notification has been received but also that the registered details match the terms of the transaction. Keep the confirmation in the franchisee’s file and provide the franchisee with a copy. Any subsequent changes to, or termination of, the registered grant of rights should also undergo legal review to establish whether further registration steps are required; a simple amendment agreement may not be enough.

Practical takeaway: before selling your first franchise, establish a separate procedure for registering rights. It should identify the person responsible, set a filing deadline, explain how requests are handled and make clear that the process is not complete until the outcome has been checked. This reduces the risk of a franchisee opening without properly formalised rights.