Brand Protection for Franchisors
At the heart of any franchise system is a strong brand. The brand is one of the key reasons that a franchisee invests in a franchise with you, rather than attempting to set up a similar business themselves. As such, it is important to keep the Brand protected. As a franchisor, you are not just just responsible for protecting the brand for your own sake, you are also protecting it for all those franchisees who have invested in franchises with you.
The starting point for any Brand Protection strategy is registering your Trade Marks. Whilst it is not impossible to enforce your rights in unregistered Trade Marks, it is much, much easier to enforce a registered Trade Mark. We would not encourage any business to start franchising without having registered its brand in the first instance.
Once registration has been granted, the next step in the franchise Brand Protection strategy is to set clear guidance in the Franchise Agreement and Operations Manual concerning how the franchisee can use the brand. Misuse of the brand is a cardinal sin for any franchisee who can expect serious repercussions for deliberate or negligent brand damage as a result of them not following the rules.
Thereafter, a Brand Protection strategy comes mainly comes down to 'monitoring' and 'enforcing' both internally and externally. These can be summarised as follows:
Internal monitoring - how are your franchisees using the brand? are they complying with the rules set out in the Franchise Agreement and Operations Manual?
Internal enforcing - do any franchisees need reminded of the rules? Do they need re-training? Do you need to send a Breach Notice requiring the franchisee to cease what they are doing?
External monitoring - are any competitors (including ex-franchisees) using any part of your brand, or calling themselves something similar? Has anyone applied to the Intellectual Property Office to seek registration of a similar brand?
External enforcing - do you need to take action against an external infringer to protect your brand? Usually this would involve the issuing of a 'Cease and Desist Letter' and, if that doesn't work, you should be prepared to go to court to protect your rights (and those of your franchisees) to the brand.
Finally, it can often be forgotten that one of the best ways of protecting your brand is to continue to grow and develop it, generating more goodwill and wider brand awareness. A cautionary tale comes from the courts in Quebec, where Dunkin Donuts were being accused by some of their franchisees that, in allowing Tim Hortons to replace them as the market leader in coffee and doughnuts in Quebec, the franchisor had failed in its duty to promote and enhance its brand. The Court agreed with the Dunkin franchisees that the franchisor was required to promote its brand, fight off competitors and protect its market share for the benefit of the franchisees.
At AlbanyFraser, we have significant experience in Brand Protection matters. Our founder, Andrew Fraser has assisted a number of high street fast-food retailers in protecting their brand and was formerly the Brand Protection Legal Manager for the Glasgow 2014 Commonwealth Games. Please gives us a call now if you would like to discuss how you can better protect your franchise brand.