Buying a franchise in Venezuela: checking trade mark rights

When you buy a franchise, you do not acquire ownership of its trade mark: you receive permission to use it under specific conditions. Before investing in shopfront signage, uniforms or advertising, check that this permission is properly supported. In franchising, commercial trust must be backed by documents linking the rights holder to the party offering you the business.

1. Identify exactly which trade mark you will use

The name familiar to the public may differ from the name of the company signing the agreement. Nor is it enough to receive an image of the logo or a statement that the trade mark is ‘protected’.

Ask for a set of documents identifying:

• The authorised mark: the name, logo and variations your outlet will use.
• The rights holder: the individual or company in whose name the rights are held.
• Protection in Venezuela: registration documents, the status of any applications and relevant records.
• The goods or services covered: the activities for which protection has been sought or obtained.
• The period of protection: relevant dates and renewal documents, where applicable.

Instruct a specialist to check the documents against the records available from the Servicio Autónomo de la Propiedad Intelectual (SAPI), Venezuela’s intellectual property authority. A filed application is not the same as a granted registration. Likewise, a foreign registration does not, on its own, establish that protection exists in Venezuela.

Ask for any discrepancies to be resolved before signing. If the business uses several marks, check each one: protection for a name does not necessarily provide identical coverage for every logo or variation.

2. Check the chain of authorisation and the legal framework

If the franchisor does not own the trade mark, it must explain what authority it has to permit its use. Request the document supporting that authority and have a lawyer check its scope. It is not enough for both companies to belong to the same corporate group.

The review should answer four questions: can the franchisor grant rights to franchisees? Does its authority cover Venezuela? Does it cover the intended business activity? Will it remain valid for as long as needed to support your agreement? If the authorisation expires before the franchise agreement, clarify how continuity will be secured and what happens if it is not renewed.

Venezuela has no comprehensive franchise-specific law or general statutory regime requiring standardised pre-contractual disclosure. The Civil Code and Commercial Code provide the general rules governing contracts and commercial matters; the Industrial Property Law is relevant to trade mark rights.

There are also Guidelines for the Evaluation of Franchise Agreements, contained in Resolution No. SPPLC-038-99 of 9 July 1999, which concern the assessment of these agreements from a competition perspective. Their scope should be examined in light of current legislation, including the Anti-Monopoly Law. They do not replace checks on trade mark rights or certify that a franchise offer is safe.

3. Define the authorisation in the agreement

Once the supporting records have been checked, reflect the findings in the agreement and its schedules. Avoid relying solely on a sales catalogue that could change or disappear to define your permission to use the mark.

The agreement should identify the permitted marks, their authorised uses and the duration of that permission. Distinguish between displaying the mark at the outlet, using it in advertising and using it through digital channels. Permission to use it at a physical outlet does not necessarily clarify who may register a domain name or open an account under the brand name.

Negotiate an express statement from the franchisor confirming that it owns the mark or has sufficient authority to grant permission to use it. Also ask it to disclose any known claims that could affect the operation and to notify you promptly of any material changes to those rights.

These statements are contractual commitments that you need to agree; they should not be treated as automatic statutory guarantees. Your lawyer should check their scope, any proposed exceptions and the remedies available if they prove inaccurate.

4. Allocate the risk of a claim

Before buying, ask what would happen if a third party challenged your use of the trade mark. The agreement should specify who must be notified, who coordinates the defence and who bears the costs, distinguishing between a claim concerning the rights granted and unauthorised use by the franchisee.

Also agree how the costs of replacing signage, uniforms, packaging or advertising materials would be handled if the mark had to change. Do not accept that every financial consequence should automatically fall on the operator without considering its cause.

If a restriction prevents you from operating under the agreed brand identity, negotiate business continuity measures and specific financial consequences, subject to legal review. Do not assume that a refund or compensation will be automatic.

Practical conclusion: before investing in your outlet’s branding, check three things: who controls the trade mark in Venezuela, what use they can authorise and who is responsible if that right fails.