Auditing Your Trade Marks Before Franchising in the UAE

Your business may have traded successfully under a familiar name for years, only for you to discover when expanding that the trade mark is registered in the founder’s name, or that its protection does not cover the services franchisees will provide. Before bringing partners into your franchise network, you need an audit that establishes what you actually own and what you can license others to use. This is not simply a review of your logo: it tests whether an asset on which someone else’s investment will depend is ready for franchising.

1. Distinguish between the trade name and the registered trade mark

Start by gathering your trade licence, trade name reservation certificate and trade mark registration certificates. Do not treat them as interchangeable documents. A trade name identifies the business in its dealings, while trade mark registration provides protection for the goods or services covered by that registration. Having a name on your trade licence does not remove the need to check whether the trade mark is registered.

Federal Decree-Law No. 37 of 2021 on the Commercial Register governs business registration particulars, including the trade name, legal form and business activity. Trade marks, meanwhile, are governed by Federal Decree-Law No. 36 of 2021 on Trade Marks. A match between the name on your shopfront and the commercial register therefore does not, by itself, establish that your trade mark protection is complete.

Create a separate entry for each element customers use to identify your business: the Arabic name, the name in another language, the logo and any distinct mark for a core product. Record each element’s status: registered, application under examination or unregistered. Do not present a registration application as a final registration certificate.

2. Verify the owner and the chain of rights

Check the owner’s name on each trade mark against the official documents of the entity that will grant the franchise. The mark may belong to the founder personally, another company in the group or a former partner. A different owner does not make expansion impossible, but it does mean you must establish the basis on which the franchisor can license its use.

Request documents showing how rights were transferred or granted, rather than relying on internal correspondence or verbal understandings. If the franchisor is itself a licensee, check that its rights allow it to grant the necessary licence to franchisees, rather than merely use the mark in its own branches.

Also review your brand identity design contracts. Paying a designer’s fees does not, on its own, settle every question about rights in the graphics, fonts and images used. Distinguish between ownership of the registered trade mark and rights in its creative components, and have any gaps addressed before distributing files to new partners.

The outcome of this stage should be clear: who owns the asset, which document proves ownership, and who can authorise its use? Record any undocumented answer as an issue to resolve, not an acceptable assumption.

3. Match protection to the proposed franchise activities

Do not rely solely on the class number shown on the registration certificate; read the description of goods and services itself. A business may have a mark registered for certain products, while its franchise model involves services that the description does not cover. The franchise package may also introduce branded products that were not part of the original use.

Create a mapping table covering:

• The element the franchisee will use, such as the outlet name or a product mark.
• The goods or services associated with that use.
• The registration relied on, its owner and its status.
• Any potential gap and the proposed action to address it.

Review the actual version of the logo too. A change to the name or its core elements may require an assessment of whether a new application is needed. Do not assume that registration of an older design automatically protects every later version. Use a specialist to assess similarity and earlier trade marks rather than relying solely on internet searches.

If a material gap emerges, determine how it affects your decision to offer the franchise. The answer may be to secure the missing protection, temporarily exclude a particular use or postpone the franchise offering. What matters is that prospective franchisees do not base their investment on a scope of protection that has yet to be secured.

4. Turn the audit findings into a valid licence

The UAE has no standalone federal franchise law, nor a general federal regime requiring a standard disclosure document for all franchise agreements. Depending on the relationship, general contract and commercial transaction rules, trade mark legislation and competition legislation apply. Federal Law No. 3 of 2022 Regulating Commercial Agencies may also apply if the relationship meets its requirements. Registering a trade mark is not the same as registering a franchise as a commercial agency.

Under trade mark law, an agreement licensing the use of a trade mark must be in writing and notarised. It does not have to be recorded in the trade marks register, although interested parties may apply to have it recorded. Do not assume that signing a franchise agreement alone satisfies the requirements for licensing the trade mark; have the wording and the appropriate notarisation process reviewed.

Tie the licence to the specific trade marks, relevant goods or services and permitted uses. Bear in mind that the licence term must not exceed the trade mark’s protection period. Review protection and renewal dates alongside the franchise term, and address how rights will continue without making assurances that have not been properly assessed.

5. Close the gaps before handing over brand assets

Keep a central file containing certificates, registration applications, ownership and licensing documents, and approved versions of the brand identity. Appoint someone to monitor renewals and notices, and designate a backup. Simply holding the documents is not enough if correspondence from the relevant authority is missed or protection expires without follow-up.

Before entering into the agreement, give the prospective franchisee an accurate statement of the trade marks they will use, their status and any material restrictions affecting them. This is a precautionary transparency measure, not a description of a mandatory federal disclosure document. Delay handing over final production files for signage and packaging until the rights and the versions to be used have been approved.

Practical takeaway: Do not grant the right to use a trade mark until you can prove who owns it, what its protection covers and that you have the authority to license it. Start with a single audit table and close any material gaps before the franchisee incurs shopfront and fit-out costs.