Drafting of franchising contracts

One of the methods of development of own business is extension of the product market of your goods (services) by establishment of a network of own vendors on other territories. But establishment of own network of shops, hotels, cafes, etc. on other territory, maintenance of the high level of service in it requires significant costs and energy from the owner.

At the same time, by selling the right for own business to other independent entrepreneurs, by training their practical skills of running such profitable business, the owner can achieve much more success.

On the other hand, business beginners know that to work under “promoted” name or trademark is much more profitable than to spend significant resources for promotion of own business and supporting of its stability.

The method for solving of above problem is franchising.

As example, here is the list of several large companies that are working under franchising system: McDonald's, Coca-Cola, Pepsi, ZINGER, XEROX, etc.

Under the franchising contract, a franchisee (buyer) buys a franchise, i.e. a permission (right) to run particular business during particular period of time, on particular territory, under the trademark or firm name of a franchiser (owner of the right) using his technologies, commercial information, know-how, etc. A franchiser has the right to control the quality of running a business of franchisee, and is obliged to help him (for example, in organizing of an enterprise of franchisee, training of personnel, management, etc.)

Unlike license contract, where a licensee acts on market as a person different from a licensor, in case of franchising, a franchisee, in mutual relations with customers, working under firm name or trademark of a franchiser, is associated with the last and acts as a representative of his goods and/or services.

Franchising contract does not require registration (unlike license contracts regarding objects of industrial property).

Franchising contract is a complex agreement that may include assignation of objects of industrial property (inventions, designs, trademarks, topography of integrated circuits, etc.) that falls under the force of laws of protecting the rights for objects of intellectual property.

Our firm of patent attorneys of Ukraine «Lazurenko & Partners» provides services for drafting of franchising contracts.