Checking Franchise Trade Marks in Taiwan: Licensing Rights, Permitted Use and Rebranding Responsibilities

When choosing a franchise brand in Taiwan, you need to do more than sample the products and visit its outlets: establish exactly what rights to use the brand you are buying. Signs, packaging and delivery platform listings all involve trade mark use. If there is a gap in the licensing arrangements, you could be required to change your trading name even after completing the fit-out. A well-run franchise network should make clear where its brand rights come from, how franchisees may use them and who is responsible if a dispute arises.

1. Check the trade marks, not just the company registration

Registering a company does not establish trade mark rights in its brand; filing a trade mark application does not mean registration has been granted. Under Taiwan’s Trade Mark Act, trade mark rights are generally acquired through registration. An unregistered brand is not necessarily barred from trading, but franchisees should not assume that the franchisor has comprehensive rights to prevent others from using it.

Ask the franchisor for the trade mark registration numbers, the proprietor’s name, the specified goods or services, the registration validity periods and the versions of the marks it intends to license to your outlet. Cross-check these details using the trade mark search system maintained by the Taiwan Intellectual Property Office (TIPO), under the Ministry of Economic Affairs. Keep a record of the search date and results.

Do not search only for the brand’s Chinese name. Check its English name, logo and combined word-and-logo marks separately. Pay particular attention to:

• Whether the marks match: If the registration covers an old logo but outlets use a new design, ask the franchisor to explain the legal basis for using it.
• Whether the goods or services cover the actual business: Restaurant services and packaged foods are not the same thing. Finding the brand name on the register does not mean every activity is covered.
• Whether the rights are secure: Check the expiry dates and ask about any opposition, invalidation or revocation proceedings, or infringement disputes.

Search results are a starting point, not a guarantee against infringement. If you find similar marks, disputed rights or conflicting information, seek advice from a trade mark professional in Taiwan rather than drawing conclusions from class numbers alone.

2. Confirm that the company signing the agreement has the right to grant a licence

It is not necessarily a problem if the trade mark proprietor is different from the company named in the franchise agreement. The brand might belong to its founder, an associated company or an overseas parent company, which then licenses it to the Taiwan franchisor. The key question is: is there an unbroken chain of authorisation from the proprietor to your outlet?

If the franchisor does not own the trade mark, ask to see documents sufficient to establish the following:

1. The franchisor is authorised to use the relevant trade marks in Taiwan.
2. The original licence allows the franchisor to sublicense them to franchisees, rather than merely operate its own outlets.
3. The licence covers your goods, services and intended forms of use.
4. The upstream licence term is compatible with the franchise agreement term.

For example, if the upstream licence expires while your franchise agreement still has several years to run, clarify the renewal arrangements and your options if it is not renewed. Do not settle for verbal assurances such as “we have always worked together”.

Taiwan’s Trade Mark Act permits trade mark licensing. A licence that has not been recorded cannot be asserted against third parties, but this does not necessarily make the licence agreement invalid. Whether to record the licence, who should handle the process and who should pay should be assessed with professional advice in light of the transaction. The presence or absence of a recorded licence alone does not determine whether the entire franchise arrangement is lawful.

3. Put the permitted brand uses in a contract schedule

Taiwan has no single, dedicated franchise statute, but franchising is not unregulated. The Fair Trade Act and the Fair Trade Commission’s principles for handling franchisors’ business practices address the provision of information in franchise transactions. Intellectual property matters are among the important information franchisors should provide in advance.

If a franchisor, without proper justification, fails to provide important information in advance as required by those principles, and this constitutes obviously unfair conduct sufficient to affect trading order, it may breach Article 25 of the Fair Trade Act. This does not mean that omitting a single document automatically invalidates the agreement. Trade mark use and infringement are primarily governed by the Trade Mark Act, while licensing commitments, breach of contract and compensation must also be assessed under Taiwan’s Civil Code and the agreement.

In practice, turn the disclosed information into an enforceable contract schedule rather than simply filing away the brand presentation. The schedule should specify at least:

• The trade mark representations, registration numbers and the party granting the licence.
• The outlets, goods, services and sales channels for which use is permitted.
• Rules for use on signs, uniforms, packaging, social media and delivery platforms.
• Whether promotional materials require approval, who approves them and the deadline for a response.
• The deadlines and procedures for removing branding and dealing with remaining packaging after the agreement ends.

In particular, clarify who will register and manage the outlet’s social media accounts, domain names and platform merchant accounts. Permission to use a trade mark does not automatically give a franchisee ownership of all digital accounts. Control of those accounts should be agreed separately.

4. Allocate infringement and rebranding costs in advance

The losses caused by trade mark problems often extend well beyond replacing a sign. Reprinting packaging, replacing uniforms, updating platform listings, suspending promotions and even closing temporarily can all affect cash flow. Consider these risks alongside the franchise fee when assessing a brand.

The agreement can require the franchisor to warrant that it has the lawful authority to grant the licence. It should also set out notification procedures following an infringement notice, responsibility for handling the matter, legal costs and the time allowed to put things right. Distinguish between two situations: a franchisee facing a claim despite using the mark as instructed, and a franchisee altering the logo without permission or using it beyond the scope of the licence. Responsibility should not be vaguely assigned to one party in every case.

If a rights dispute prevents continued use of the brand, agree in advance whether a replacement brand requires the franchisee’s consent, who pays for alterations to the premises, and how termination and refunds will work if the problem cannot be resolved. These protections do not necessarily arise automatically under law; they need to be secured in the contract. Nor can the parties’ internal allocation of responsibility prevent third parties from bringing lawful claims.

If you receive a solicitor’s letter or an infringement notice, do not admit liability on your own initiative, but do not ignore it either. Retain the agreement, licensing documents, designs approved by the franchisor and correspondence. Notify the franchisor promptly and obtain independent legal advice. Whether you may suspend payments or terminate the franchise requires a separate assessment.

Practical summary: Before committing to a franchise, assemble three things: the trade mark search results, complete evidence of the licensing chain, and a contract schedule defining permitted use and rebranding responsibilities. If the franchisor cannot clearly explain what it has the right to license, do not rush into spending on fit-out work and branded materials.