How to Verify Trade Mark Usage Rights When Buying a Franchise

When joining a franchise network, seeing a familiar name above the door does not prove that the company offering you the right to use it has the authority to do so. The trade mark may belong to another company, and the representative you are dealing with may have limited or time-bound authority. Checking trade mark authorisation before committing to an initial fee, fit-out costs and a lease reduces the risk of investing in a name you cannot use. The aim is not simply to see a registration certificate, but to verify the chain of permission from the trade mark owner through to your business.

1. Check the trade mark records independently of the proposal pack

First, ask the franchisor for a list of the trade marks you will use, together with their application or registration numbers. The business name, the logo on the signage and the sub-brands used on products may be covered by separate registrations. Check all the signs you will use in day-to-day operations, not just the logo in the presentation.

Check the following points in the Turkish Patent and Trademark Office records:

• Rights holder: Which individual or company is listed in the record? Is this the same entity you will be signing the agreement with?
• Legal status: Is the trade mark registered, or is the application still pending? An application does not provide the same assurance as a completed registration.
• Scope: Do the protected goods and services cover your planned business activities?
• Dates and duration: When is the registration due for renewal? Who will monitor renewal deadlines during the agreement's term?

Checking the class number alone is not enough; you should also assess the descriptions of the goods and services within that class. A foreign registration certificate does not, by itself, establish that the trade mark is protected in Turkey. If an international registration designates Turkey, have its protection status in Turkey verified separately.

Obtaining a trade mark attorney's assessment of the current records is particularly useful where similar names exist or several trade marks are used. Remember that publicly available records may not reveal every dispute; ask separately about ongoing litigation and oppositions.

2. Establish the chain of authorisation from the trade mark owner to you

It is not necessarily a problem if the trade mark owner and the franchisor are different entities. However, the arrangement between them must actually cover the usage rights being offered to you. Belonging to the same corporate group or sharing directors does not automatically confer authority to grant permission to use a trade mark.

Ask the franchisor for the licence agreement or documents establishing its authority. If commercial confidentiality prevents disclosure of the full text, agree on a verifiable copy containing the key provisions and, where necessary, written confirmation from the trade mark owner. In particular, look for answers to these questions:

• Does the authorisation cover Turkey and your intended business activity?
• Does the franchisor have the right to permit third-party use or grant sublicences?
• Does that authority last for the full term of the agreement being offered to you?
• If separate approval from the trade mark owner is required, has it been obtained for your business?

For example, if the Turkish representative's authority expires before your agreement ends, do not rely solely on an assurance that it ‘will be renewed’. Set out in writing how your use of the trade mark and your investment will be protected if renewal does not take place.

Also verify the signatory's authority to represent the company by checking trade registry records and the relevant authorisation documents. If the payment account belongs to a different company, document the legal and commercial reasons for this. Do not confuse authority to license a trade mark with authority to collect payments.

3. Understand Turkey's legal framework

Turkey has no dedicated franchise law governing franchise agreements on its own. Nor is there a general requirement to register as a franchisor on a franchise register, or a mandatory franchise-specific pre-contractual disclosure document system. You should therefore not assume that the standard disclosure pack used in other countries must be provided by law in Turkey.

This does not mean there is no legal protection. The Turkish Code of Obligations No. 6098 is relevant to matters such as contract formation, performance and breach; the Turkish Commercial Code No. 6102 governs aspects of commercial relationships and unfair competition. The Industrial Property Law No. 6769 provides the principal legal basis for trade mark rights and licensing arrangements. The Law on the Protection of Competition No. 4054 must also be considered in relation to commercial restrictions on use.

The principle of good faith and the circumstances of a particular case may give rise to pre-contractual liability. The absence of a dedicated disclosure system does not permit misleading information. Equally, do not interpret membership of an association, a statement of adherence to a code of conduct or a trade registry entry as government approval of a company's authority to grant franchises.

Recording a trade mark licence on the register, and its effect against third parties, require separate legal review. The absence of a requirement to register a franchise agreement on a dedicated register is a different issue from registration procedures relating to the trade mark licence.

4. Reflect the verified rights in the agreement and payment schedule

Do not leave the findings of your checks sitting in an email folder. Clearly identify the trade marks to be used, their registration numbers, the permitted forms of use and the basis of the authorisation in the agreement or its schedules. Clarify the scope of permitted use separately for signage, packaging, websites and social media accounts.

Ask the franchisor to give a written undertaking that it holds the necessary rights and will maintain its authority throughout the agreement's term. Specify who will handle the defence if a third party asserts trade mark rights, who will pay the costs and how any costs of changing the signage will be shared. Have your lawyer check whether any limitations of liability undermine these undertakings.

Where possible, make the initial payment conditional on the authorisation documents being supplied and any necessary approvals being obtained. Expressly agree that any amount paid will be refunded if the documents are not provided; do not assume you have an automatic right to a refund.

Practical takeaway: Before transferring any money, complete three sets of documents: current trade mark records, evidence of an unbroken chain of authorisation to use the marks, and an agreement consistent with those rights. If there is an unexplained gap, postpone spending that would be difficult to recover until the documentation is complete.