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Using trademarks in a franchise agreement

Trademark licensing is central to a franchising agreement

Aug 08, 2011 00:00 am

Using trademarks in a franchise agreementOne of the most important factors of a franchise agreement is that the brand agrees to license the use of its trademark to a franchisee.

 

Typically in this scenario, the franchiser retains ownership of the brand's trademark and allows the use of the trademark by one or more companies says the Intellectual Property Office of the Philippines.  The franchisee may be required to pay royalties to use a well-known brand. Depending on the details of the agreement, the franchiser will retain a certain degree of control over the franchisee and the use of its trademark to maintain quality.

 

In a franchising agreement, the franchiser allows another person or the franchisee to use his way of doing business within a set of limits in exchange for a franchise fee. This includes allowing the use of the company trademark, know-how, customer service, software and store design to name a few components. 

 

According to the Intellectual Property Office of the Philippines, it is also possible to sell or assign a trademark independently from the business that currently owns it. In the case of sale or assignment of a trademark, it may be required to deposit a copy of the agreement or parts of it at the trademark office.

 

One example of a franchise company allowing the use of its trademark is the pizza brand, Lots' A Pizza.  The company has already developed an efficient system of selling its products.  The company imparts its knowledge and experience to a franchisee while also retaining the right to supervise and control the franchises. Moreover, the franchisee is then authorized and obliged to use the well-known Lots' A Pizza trademark.

 

For more information on registering your trademark in the Philippines, check out the Intellectual Property Center web site at www.ipophil.gov.ph

 

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