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IP is at the heart of franchising. In addition to the distinctive branding, there will be a bespoke system for how to run the franchise based on certain know-how.
It is important that franchisor take appropriate steps to protect their IP from third parties, most importantly their franchisees.
The kinds of IP involved in a franchise will typically include the following:
The type of protection that is available depends on the type of IP.
A franchise is basically a licence by a franchisor to a franchisee allowing the franchisee to use the franchisor’s IP, subject to the terms of the franchise agreement and other relevant documents including the operations manual.
A well drafted franchise agreement will contain a variety of legal provisions that are designed to protect the franchisor’s IP, including the following:
In a franchise situation it is common for the franchise IP to be owned by either one of the founders personally or a different company to the franchisor. This is done to shelter the IP from the commercial and legal risks taken by the franchisor.
Most franchise agreements refer to the franchisor potentially asking the franchisee to sign a separate IP licence but most franchisors don’t bother doing that and just rely on the IP licence provisions contained within the franchise agreement.
If you need any advice on franchise intellectual property, please contact a member of our team in confidence here or on 02920 829 100 for a free initial call to see how they can help.
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