Whether you’ve considered purchasing a fast food franchise or a cell phone repair franchise, you’ve probably spent time evaluating the pros and cons of this business structure. Today, one advantage provided by some franchises involves the right to utilize well-established business trademarks, logos, and other items of intellectual property. This brief article offers a quick overview of this complex subject.

The Benefits of a Well Known Business Identity

New business owners sometimes struggle to establish a recognized presence on a local level. While the vast majority of people likely won’t immediately recognize the name of a startup, almost everyone readily identifies popular well-established national companies. Many widely known firms have invested billions of dollars in promotional campaigns over the years. They actively seek to advertise their brands to the public through media and print ads and via online social media posts.

An Important Contractual Issue

Investors considering the purchase of franchises sometimes discover significant benefits in selecting firms with established company names and logos. Unlike entrepreneurs who build a new business independently, franchisees usually obtain the right to employ the franchisor’s trademarks under certain circumstances. Most franchise agreements address this topic in detail.

For example, a fast food franchise may require a new franchisee to utilize its brand colors on its logo-carrying disposable beverage packaging and napkins. Sometimes franchisors require the use of street signage depicting the firm’s name and logo in a specific format. These types of contractual requirements help promote the franchise, as well as the individual franchised location. Franchisors frequently possess an important interest in ensuring that their franchisees employ logos and trademarks in a uniform, consistent manner.

A Famous Example

National and international franchises sometimes discover maintaining robust policies concerning these topics assists name recognition and company goodwill. Consider one famous example. Today, many Americans automatically associate “the golden arches” with a popular fast food outlet.

McDonald’s has used the consistency of its advertising, trademarks, and logos very effectively. These items help boost the firm’s visibility on a local level. As a result, its franchisees benefit from the instant recognition they obtain whenever they display this intellectual property. Numerous other illustrations of this principle occur in the business world.

An Important Issue

Prospective franchisees should consider paying close attention to this subject. Most franchising agreements address trademarks. Discuss these provisions carefully with your attorney.