Reading time: 3 minutes

Franchises rely heavily on their intellectual property rights (IP Rights). In a franchise agreement, there will always be a clause relating to the IP Rights of the franchisor, and the franchisee’s terms of use of this intellectual property (IP), such as the extent to which it is licensed in the franchise agreement. The IP usually refers to the trademarks of the franchise, which is essentially the brand of the business, such as its logo, business name, tag line, colour scheme, and any other distinctive identifier of the franchise.

Brand Protection

Franchises, by their very nature, maximise use of their IP. In general, the way in which the IP is used is controlled by the franchisor.

The system of franchising allows goods or services to receive maximum exposure in an efficient manner by creating a network of outlets that follow a tried and tested system to deliver the goods or services in the most efficient and profitable way possible.

This appeals to franchisees looking to invest in an established brand with valuable goodwill. The financial viability of a tested brand is stronger than that of a newly emerging entrant into the franchise market.

Trademarks are important to franchises, as they indicate (to the consumer) the origin of the good or service. Once the customer knows the brand, it will associate the brand with the user experience. If this user experience was good, the customer may start to regularly visit the franchise, regardless of the outlet.

Due Diligence

Prior to entering into a franchise agreement with the franchisor, the franchisee should commence the due diligence process to ascertain what IP the franchisor actually owns. This process will clarify which trademarks are registered and unregistered. Remember, some IP is not registered in any case, including copyright and trade secrets. Sometimes a combination of registered and unregistered trademarks can help to protect the brand and goodwill.

The IP regime and system of registration in emerging markets can vary greatly. Thanks to a number of international treaties, different systems of IP have been aligned to make registration over certain transnational regions more accessible.

A good example would be the Office of Harmonisation in the Internal Market, which allows trademark registration for the entire European Union. There is also the World Intellectual Property Organisation, which covers the US, China, Japan, and the EU.

To protect the brand and goodwill, the franchisor should have international protection of its trademarks before entering into any franchise relationships in other countries.

There is always the risk that a copycat trademark will have been made in an emerging economy, which is why it is so important to register your valuable trademarks before this happens.

Interesting fact: In Baghdad, Iraq, there is a McDonalds knock off called Madonal!

If this happens, the franchisor will either have to try buying the trademark from the owner, or looking into launching a new brand. Unfortunately, changing the branding of the franchise can destroy the goodwill and reputation of the brand.


For more information see part two of how to protect the brand and goodwill of your franchise business. If you would like to speak to an IP lawyer, or a franchise lawyer, please get in touch by calling LegalVision on 1300 544 755.


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards