Buying a franchise: check the trade mark rights

A recognisable brand can be a major reason for joining a franchise network. But a familiar logo does not necessarily mean that the franchisor has the rights needed for its use in Slovenia. Before paying the initial franchise fee, check three things: what is protected, where that protection applies and who can grant you the right to use it. This reduces the risk of having to change your name, signage or online presence after opening.

1. Check the trade mark, not just the company name

Entry in a business register is not the same as trade mark registration. Nor does a registered domain name or a popular social media profile, on its own, prove trade mark rights. A franchisor may lawfully trade under a particular name, but that does not establish the scope of protection for the mark it offers to franchisees.

First, identify the marks you will actually use: the brand name, logo, slogan or a combination of these elements. Then check the relevant entries in official databases:

• Slovenian Intellectual Property Office: for national trade marks valid in Slovenia.
• European Union Intellectual Property Office (EUIPO): for European Union trade marks, whose protection also covers Slovenia.
• World Intellectual Property Organization (WIPO): for international registrations; you need to check whether protection actually takes effect in Slovenia or the European Union.

For each result, record the owner, registration number, status, registration expiry date and list of goods and services. A trade mark application is not yet a registered trade mark. Equally, protection for one type of goods does not automatically provide appropriate protection for all the services you intend to offer.

Also compare the mark shown in the register with the version in the franchisor’s promotional materials. If they differ, ask the franchisor to explain the legal basis for using the new version. Have any unclear results reviewed by a trade mark attorney or a lawyer with intellectual property expertise.

2. Establish who can authorise you to use the mark

The party offering you the agreement is not always the trade mark owner. It may be an associated company, a national partner or a master franchisee developing the local franchise network. There is nothing inherently wrong with this arrangement, but there must be a verifiable chain of authority.

If the franchisor’s name differs from the owner listed in the register, ask for evidence that it can authorise you to use the mark. The key question is whether its rights include granting sublicences or rights to franchisees, and whether they cover Slovenia and your intended business activity. Simply claiming to be an “official partner” is not enough.

Check that the time periods align, too. If the franchisor’s licence expires before the planned end of your franchise agreement, you need a clear explanation and an appropriate contractual solution. A promise that renewal will definitely be arranged is no substitute for a valid legal basis.

If the franchisor is unwilling to disclose the full underlying agreement for confidentiality reasons, suggest a review by a legal adviser bound by confidentiality, or suitable documentary evidence with commercially sensitive sections redacted. The document must still allow you to verify the scope, duration and limits of its authority.

3. Understand Slovenia’s legal framework

Slovenia has no specific franchising act, no legally prescribed standard pre-contractual disclosure document and no mandatory dedicated franchise register. This does not mean that franchise networks operate without legal rules or that franchisors bear no responsibility for their statements.

The Slovenian Obligations Code (OZ) is relevant to the contractual relationship, including its principles of good faith and fair dealing and its rules on negotiations, performance of obligations and liability for damages. The Industrial Property Act (ZIL-1) governs national industrial property rights, including trade marks. For European Union trade marks, Regulation (EU) 2017/1001 on the European Union trade mark is directly relevant.

Depending on the terms of the arrangement, Slovenian and EU competition rules also apply. Franchise industry codes of ethics are not a substitute for the law; their relevance to a particular relationship also depends on membership and contractual commitments.

When buying a franchise, you will generally be acting for business purposes, so do not expect the same protection as a consumer. Keep evidence of the franchisor’s assurances about the trade mark alongside draft agreements and the signed contract.

4. Define the right to use the mark precisely in the agreement

The agreement should do more than simply refer to using the “system’s trade mark”. A schedule should identify the specific marks, registration numbers and permitted forms of use, and refer to the applicable brand guidelines.

Specifically address use on your premises, website, social media, packaging and local advertising. Establish who approves materials, who controls domain names and user accounts, and who keeps track of registration renewals.

Also agree what happens if a third party challenges use of the mark, rights are lost or a rebrand is required. Who handles the legal defence? Who pays for new signage and other changes? What remedies are available if inadequate rights prevent you from trading? A general permission to use the mark does not resolve these questions.

Practical takeaway: before paying, bring together three pieces of evidence: valid protection, the franchisor’s authority and clear contractual permission. If any link is missing, resolve the uncertainty before taking on a financial commitment.