Business Goodwill could be in the Name

A Franchise has many valuable assets such as stock, plant and equipment and various IP. The goodwill component can also include valuable business names or logo.

It is important to note that, the current business name registration system does not provide the registrant with a proprietary interest in a name. In basic terms another party my challenge the rights to your business name.

As is currently the case you may need to seek trade mark registration if you wish to exert or obtain ownership rights over the name.

Michael Hymer CPA (FCPA) Taxation Director at Babo Group says that in his experience with prospective Franchisors or business operators is that they have not considered the value in their business name. This realisation only occurs when a competitor commences business, when a competitor challenges your naming rights and when it’s time to sell the business.

Hymer says that if franchisors or business operators don’t have correct business name registrations or trade marks, then there is one less item to sell to a prospective purchaser.

Consider this, they may not want your stock, just your name.