Have No Fear

Intellectually Speaking

Franchise agreements have been described as trademark licenses in overdrive. They grant you the limited right to use a franchise company's intellectual property, which includes the trademarks, techniques, procedures, uniforms and expertise that comprise the franchise system. These rights are limited to allow the franchisor to preserve ownership of its trademarks, copyrights and trade secrets.

As a franchisee, you have the right to use and display the franchisor's trademark (or family of trademarks) only as the franchisor authorizes. All signs displaying the mark, all printed materials, all vehicles and even all Web sites you use must be approved in form, color and design by the franchisor.

Although it's a point of contention in the franchising community, the bottom line is that trademarks and other intellectual property belong to the franchisor, not to franchisees.

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This article was originally published in the December 1998 print edition of Entrepreneur with the headline: Have No Fear.

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