Licensing and franchising

Your mark can earn outside your own operation

A registered trademark is property. It can be licensed to a distributor, franchised to an operator, contributed to a joint venture, pledged or sold. That is the difference between a name you trade under and an asset on the balance sheet.

But a licence is only as good as the registration behind it, and only as safe as the control it keeps. The recurring failure is a licence granted over a mark that was never registered, or registered in a class that does not cover what the licensee is actually selling.

The clauses that decide the disputes

• Scope. Which goods and services, which territory, exclusive or not, and for how long.
• Quality control. The right to inspect and to set standards. Without it, a mark can be undermined by the very people using it.
• Ownership of what the licensee creates. New designs, adaptations and local variants default to the person who made them unless the agreement says otherwise.
• Termination and what happens after. Stock still in the channel, signage, domains and social accounts in the licensee name.
• Sub-licensing. Silence here is usually read against the owner.

Franchising adds a layer

Mexican franchising is regulated and the franchisor owes the franchisee disclosure before signing, covering the business, the fees and the rights being granted. Getting that wrong gives the franchisee grounds to unwind the deal, so the disclosure document and the trademark position have to be built together rather than one after the other.

We draft and review licence and franchise agreements with the registrations that support them, and tell you plainly when the portfolio is not yet ready to license.