Should a Franchisor monitor and enforce the use of their trademark(s) by their
The heart of the franchise business lies in one of its most valuable assets – a unique
mark and brand created and established by the Franchisor in the marketplace. It can be
seen as the platform on which the business is built and expanded as this is how
consumers usually recognize the products and services offered by a franchise and a
market niche can be formed. Instead of having to develop a mark and business system
from scratch, a Franchisee capitalizes on an existing mark and business system which
has been proven and one that has garnered significant recognition and loyal clientele.
The success of a franchise relies upon the Franchisor and Franchisee to protect the
rights to this asset.
One of the worst things that could possibly happen to a franchise and Franchisor, as the
main owner of a mark, is the loss of rights to that mark and all the goodwill that goes
with it. This is usually stems from the wrong usage and representation of the mark by
other parties including their Franchisee. The wrong usage and representation of a mark,
especially by a Franchisee, will greatly reduce the value of the mark.
Now you may be wondering what constitutes as wrong usage of mark? Well,
inconsistency in the manner the mark is represented to the public is one example of
wrong usage. Use of mark in various different color codes, in different font styles, on
different backgrounds or in different arrangements creates a mark that is unstable and
unreliable in the eyes of a consumer.
Using the mark in a manner that is vulgar and offensive to the public is another example
of wrong usage. The value of the mark reduces as the image associated with the mark
will be a tarnished one. Let’s say a fine dining franchise in a shopping mall is promoted
by the Franchisee by using female models that are dressed indecently. These female
models are asked to wear clothes with the mark embedded in the clothes. This results
in the public associating the mark and the fine dining franchise with the image of the
models. As a result, the mark that was built up by the Franchisor starts to lose its value.
As a result of this, all the efforts and heavy marketing invested into building the brand
would be wasted and the market share previously held by the franchise would also be
It is thus important that a Franchisor ensures that the usage and representation of their
mark is correct at all times, especially by their Franchisee, in order to preserve the rights
to the mark and success of the franchise as a whole.