Intellectual property: get it right

Franchisors and franchisees also have to deal with what is so nicely called intangible products of the mind. In plain Dutch this includes brands, logos, trade names, color combinations and slogans. It would go too far at this point to provide a full explanation of all these matters about the way in which such matters should be registered and protected. However, it is very important that all parties involved in a franchise organization realize that they are working with such intellectual property rights, ranging from the name of the franchise organization to the house style of the stationery, shop fronts and color schemes of counters. It will often be the case that it is the franchisor who has designed things and has also protected or must protect them under trademark law. In general, it is part of good franchisorship to ensure that this is actually provided with adequate trademark protection, so that the individuality, originality and distinctiveness of the franchise organization is safeguarded in this way, in particular also for the benefit of the affiliated franchisees, who pay a fee to the franchisor, partly for this reason. In addition, it is equally important that the franchisor adequately safeguards his own rights in his relationship with the franchisees. In general, franchisees obtain a license to use the brands and the like of the franchisor through the franchise agreement. The rights and obligations in that context must be comprehensively and adequately laid down in the franchise agreement, with attention being paid to the situation at the end of the franchise agreement, by means of dissolution, cancellation or, for example, bankruptcy. In particular, in the latter circumstance, if nothing is provided for in the franchise agreement, the situation may arise in which the licenses issued to the franchisees remain with them, so that essentially nothing remains of the franchise organization for a trustee, either.

The above is by its nature a very limited representation of what is relevant with regard to intellectual property. The purport of this contribution is therefore in particular the message that franchise parties are dealing with intellectual property rights and that this must be adequately arranged, including in the franchise agreement.

Ludwig & Van Dam franchise attorneys, franchise legal advice