Implementing a franchise program

As franchising requires franchisees to pay the franchisor for the right to use the franchisor’s brand and intellectual property, it is critical that the brand and intellectual property are appropriately protected. The first thing a prospective franchisor must do before commencing franchising is to ensure that the core items of intellectual property are owned by the franchisor and registered.

Registration should be effected in Australia and ideally, in any regions into which the franchisor is likely to expand in the future.

A franchisor will normally seek to register the following:

· The core brand applicable to the franchise system as a trademark or series of trademarks

· Any logo or essential features of the corporate image of the franchise system. Trademark legislation in many countries now allows registration of distinctive colours, shapes and even smells

· The franchisor’s name and any key brand names as domain names.

Trademarks are not the only aspect of the franchise system that the franchisor should protect. The intricacies of the franchise system will be disclosed during the recruitment process to allow a prospective franchisee to make an informed decision as to the purchase of the franchise. It is prudent to have a written confidentiality agreement, signed at the commencement of negotiations, to contractually bind the prospective franchisee and any individuals who may gain access to information and not to disclose or misuse confidential information.

Consistency of image is the essence of franchising. To protect the integrity and value of the trademarks and brand, it is usual to specify how the marks may be used and describe the action to be taken by the franchisee to protect against infringement.

Read more information about Franchise Council of Australia is a not for profit membership organisation that is the peak body representing the franchising sector in Australia.