What is a franchisor’s intellectual property?

When you buy a franchise, you’re not just investing in a business model. Instead, you’re buying the right to trade under someone else’s brand.

Understanding how that brand and the wider franchise system are legally protected is essential. These protections directly affect your ability to trade, compete and grow your business safely.

What does “intellectual property” mean in franchising?

Before looking at protection and legal risk, it helps to understand what people actually mean when they talk about intellectual property (IP) in a franchise.

Vicky Wilkes, head of legal at Aston Villa Football Club, explains that IP refers broadly to ideas and creations. This is rather than physical assets.

She says intellectual property is used to describe “creations of the mind”. This includes things like inventions, designs, art, music and written works. Some IP can be protected through registration, while other types are protected automatically under law.

In a franchise context, this matters because the franchisor is not selling you a brand outright. Instead, “the franchisor will grant the franchisee the right to use some intellectual property, such as trade marks and the know-how that is required to operate the franchised business”.

John Pratt, senior partner at specialist law firm Hamilton Pratt, adds that the term is often used broadly in franchise agreements “to include all items relating to the franchisor’s brand and know-how”.

These items remain the franchisor’s property and are licensed to the franchisee for the duration of the agreement.

What intellectual property usually belongs to a franchisor?

Once you understand the term, the next step is knowing what IP a franchisor actually owns and licenses to franchisees.

According to John Pratt, a franchisor’s intellectual property usually has three main elements:

● the brand – typically protected by a trade mark

● the documentation it produces – such as the operations manual, usually protected by copyright

● its technical knowledge and experience – the confidential methods and experience that underpin the franchise system

Pratt notes that most franchisors don’t need to take any formal steps to protect copyright in the UK, because “it arises automatically”. Know-how, meanwhile, is protected contractually by requiring franchisees to keep it confidential.

Why is brand protection so important in a franchise?

A franchise brand is central to the value of the opportunity. This is because franchisees rely on customer recognition and reputation built by the franchisor.

John Pratt points out that franchisees are not just buying a business format, but also benefiting from a brand that should become more valuable over time, attracting customers across the network.

Because of this, most franchisors take steps to protect their brand through trade mark registration. While this is not legally required, Pratt says it is “highly desirable”. This is because it strengthens the franchisor’s ability to protect franchisees from copycats and competitors.

How can I check if a franchisor has registered its brand as a trade mark?

If you are considering a franchise, you should not simply assume the brand is protected. Shelley Nadler, legal director at Bird & Bird, explains how to check this yourself.

She says a franchisor may have registered its brand either as a Community Trade Mark or as a national trade mark in the UK. To find out, use the online database at the UK-IPO. The database allows you to search either by brand name or proprietor.

Once you locate the trade mark, Nadler stresses that “it is important to check that the ‘Status’ specifies it is registered”. An application that has not yet been registered does not offer the same protection.

Does the type of trade mark registration matter?

Not all trade marks give the same level of protection, and this is an area that prospective franchisees often overlook.

Shelley Nadler warns that a stylised trade mark, which includes a specific font or logo, offers narrower protection than a word mark.

She says: “In order to give the broadest possible protection, the brand should be registered as a ‘word mark’ in plain black font.”

She also advises checking whether any stylised trade mark registered actually matches how the brand is used in practice by the franchisor and existing franchisees.

Are trade mark searches enough on their own?

A UK Intellectual Property Office search is essential, but it should not be the only check you carry out.

Shelley Nadler cautions: “There could be other non-registered rights not shown in the UK-IPO search”. She recommends carrying out additional searches through Google and Companies House, and checking whether relevant domain names have been registered.

Because trade marks can be complex, Nadler advises franchisees to involve a professional. Show the results of your searches to a lawyer. They can advise on the level of protection the franchisor has actually secured.

What if the franchisor doesn’t have a registered trade mark?

While most established franchisors do register their brand, some rely on unregistered rights. John Pratt explains that this should raise concerns.

Although unregistered brands can be protected through a passing off action, Pratt warns that such claims are “complex and expensive – much more so than an action to enforce a breach of a registered trademark”.

As a result, franchisors without registered trade marks are in a weaker position to protect both themselves and their franchisees from infringement.

How do franchisors stop competitors copying their system?

Protecting a franchise system goes beyond trade marks alone. Vicky Wilkes explains that franchisors should control information from the very start of discussions.

She says a franchisor should insist that potential franchisees sign a confidentiality agreement before any information is disclosed. This sets out how information can be used and how long confidentiality obligations last.

Conclusion

Ultimately, intellectual property sits at the heart of the franchise relationship. Vicky Wilkes advises that before signing a franchise agreement, you should always check that the franchisor owns, or has legal rights to use, the franchise network’s intellectual property.

She explains this is essential “to avoid a situation where a third party may bring a claim against you for using, for example, a trade mark they already own or have rights in”.

Taken together, the advice from our experts points to the same conclusion: understanding who owns the brand, how it is protected, and how those rights are enforced is not a technical detail, but a fundamental part of assessing any franchise opportunity.