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When It Comes to Trademarks Franchisors Need to Do Their Home Work

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Whether you’re a current franchisor or a business owner contemplating launching a franchise program protecting your brand name is much more important than you may realize.

A business trademark is one of the most important assets that a business has. Some businesses with seemingly little value have been able to sell their trademark or name for more than the total value of its remaining assets. In the case of franchising, a trademark represents the brand that the franchise system will build and the value the franchisees expect to receive when purchasing a franchise. In addition, franchisors that seek to export their franchise to other countries depend upon their brand name, as much as their operating model and products, to sell master franchise rights. Today more than ever a brand name can become well know or prominent throughout the world through the Internet, Facebook and Twitter. This can lead to the theft of your brand.

There are a number of reasons why businesses and franchisors need to protect their brand and trademark them as diligently as possible.

  1.  Any independent business that contemplates franchising their business concept or expanding their network, needs to trademark their brand ASAP.
  2.  A franchisor that is considering expansion into other countries should trademark their brand. In some countries, such as China, a trademark registration must be obtained within that country since a blanket trademark registration (Madrid Protocol) is not recognized.
  3.  A franchisor may wish to register their trademark in other countries and/or file for a blanket registration since this could be a valuable asset in the event the franchisor is acquired.

Simply registering a trademark in the U.S. or in the franchisor's native country may not be sufficient if the franchise expands or is sold. Franchisors would be wise to contact their trademark attorney and discuss the possible need to further protect their brand.

© 2012 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com

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