Franchising in Taiwan: Clearing Copyright and Licensing Marketing Materials for Franchise Outlets

When opening an existing business to franchising, head office will often supply franchisees with product photos, menu designs, promotional videos and social media posts. But ‘head office has always used them’ does not mean ‘every franchise outlet can use them’. Before creating a shared asset library, clear the copyright position so that brand support does not expose the entire franchise network to infringement risks.

1. Distinguish ownership of files from ownership of rights

Receiving original images from a photographer or editable files from a designer, or paying production fees in full, does not automatically give head office all economic rights in the work. Taiwan’s Copyright Act sets out different rules for works created by employees in the course of their duties and works commissioned from others. The scope of permitted use still needs to be checked against the working relationship and contractual terms.

For example, an agreement commissioning product photography may cover only head office’s website, not advertising placed independently by franchise outlets. Franchisees are generally independent operators and should not simply be treated as internal users within head office’s organisation.

Taiwan has no single dedicated franchise law covering every aspect of franchising. Franchise transactions are governed by legislation including the Fair Trade Act and the Civil Code, while the use of marketing materials also falls under the Copyright Act. The Fair Trade Commission’s guidelines on franchisors’ business practices identify the names, permitted scope of use and restrictions of licensed intellectual property rights, including copyright, as material franchise information. Head office should therefore avoid making a vague promise to ‘provide all marketing materials’ during recruitment.

2. Create a rights register for every asset

Start by taking stock of materials already in use and those intended for franchise outlets, rather than checking trade marks alone. For each asset, record:

• Source and evidence: Who created it, who supplied it, and where the contract and licence terms are stored.
• Basis of rights: Whether head office owns the economic rights or holds only a limited licence to use the work.
• Authorised users: Whether use is restricted to head office, extends to named franchise outlets, or covers the whole franchise network.
• Permitted uses: Whether it may be printed, uploaded to social media, used in advertising, resized or rewritten.
• Duration and territory: When the licence expires, which territories it covers, and whether it limits the number of outlets or user accounts.

Check permissions separately for people appearing in photographs, music in videos, font software and stock assets. A licence for a video does not necessarily cover its soundtrack. Likewise, paying for design services does not mean that the designer’s font files can be distributed to every franchise outlet for installation.

Classify assets as ‘cleared for franchise use’, ‘additional permission required’ or ‘use suspended’. A file without supporting evidence should not be treated as cleared merely because it sits in a shared company folder.

3. Secure franchise-use and sublicensing rights

When obtaining additional permission from creators or suppliers, make it clear that independent franchise outlets will use the materials. Head office can ask the rights holder to license named franchisees directly or obtain sufficient sublicensing rights itself. Do not assume that a general commercial-use licence necessarily permits sublicensing.

Depending on operational needs, the contract can expressly cover franchisees printing menus, posting images on their own social media accounts, engaging local advertising agencies to produce promotional materials, and displaying products on food delivery platforms. If cropping, translation or rewriting is allowed, specify the limits on alterations and take account of the protection afforded to moral rights. The term ‘buyout’ is no substitute for precise contractual terms.

Music requires particular attention. Playing background music in an outlet and adding a song to a promotional video may involve different uses and rights. A personal streaming subscription is not, by itself, evidence of permission for in-store or advertising use. Check the intended use with the rights holder or the relevant collective management organisation.

4. Explain restrictions and costs to franchisees

Once rights have been cleared, set out the conditions franchisees need to know in a materials-use schedule: what head office supplies, what outlets must purchase separately, and which uses require prior approval. Where stock-image charges, music licence fees or asset-update fees apply per outlet, disclose the amount or estimated amount, who must be paid, and who is responsible for renewal.

Under the guidelines mentioned above, material franchise information should, as a general rule, be provided ten days before a franchise or preliminary franchise relationship is entered into. There is also provision for a reasonable period determined in light of the circumstances of a particular case, or a period agreed between the parties. Core restrictions on the use of materials and related costs should not be left until after an outlet opens. Head office should also retain evidence that the information was supplied.

The schedule must match the licences actually obtained. For example, if the rights holder permits use only by named outlets, head office cannot promise franchisees that they may freely pass the materials to other branches. Before adding an outlet, changing its operator or opening a separate online shop, check whether the licence needs updating.

5. Establish expiry, removal and infringement-reporting procedures

Appoint someone to manage the asset library and label each approved asset with its version, permitted uses and expiry date. Showing restrictions when franchisees download an asset is more practical than issuing a separate, lengthy rulebook that is difficult to consult.

As a licence approaches expiry, head office should notify outlets to replace the materials and check in-store print materials, social media posts, paid adverts and product pages on third-party platforms. Whether published content can remain available depends on the original licence terms; do not assume that it never needs to be removed. When a franchise relationship ends, the use of materials and retention of files must also be handled in accordance with the contract.

If an outlet receives an infringement notice, it should first preserve the notice, publication records and licensing documents, then refer them to the designated contact for review. Where necessary, suspend the relevant use and seek legal advice. Internal arrangements allocating responsibility between head office and franchisees do not override a rights holder’s claims concerning actual infringement.

Practical takeaway: Start with one set of marketing materials intended for the first franchise outlets. Check each item against four questions: ‘Who holds the rights? Who may use it? How may it be used? For how long?’ Where an answer is missing, obtain the necessary permission or replace the asset with one whose rights are clear before promising it as part of your franchise support.