Maximise Your Intellectual Property to Enhance Franchise Value

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• Maximise Your Intellectual Property

• To Enhance Franchise Value

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Introduction

• In essence, franchising is an intellectual
  property (IP)-based business model since it
  offers a conducive environment for IP
  commercialization. Franchisees profit by gaining
  access to an established brand to help launch
  their own businesses, and franchisors profit by
  allowing use of their intellectual property (IP)
  (including trade marks, patents, designs,
  copyright materials, know-how, and/or
  confidential information) in exchange for a fee.
• In order to safeguard their IP and maximise the
  value of their franchise offering, franchisors
  need consistently put their intellectual property
  (IP) at the forefront of their business
  activities.

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1. Recognize and Assess Your IP

• Due to inaccurate assessments of their
  intellectual property and its potential for
  protection, businesses frequently undervalue
  their IP. In the long run, this could lower the
  value of the IP. The franchise parties may
  discover that the brand value is abruptly harmed,
  for instance, if a franchisor has failed to
  appropriately assess and protect its brand(s) and
  its trademarks are unregistered or judged to be
  unenforceable. This may even necessitate a costly
  rebranding and expose the franchisor to
  franchisee lawsuits. Contact the franchising
  lawyers for a consultation if you have any
  questions regarding this.

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• Have your IP correctly evaluated from the
  beginning and keep talking about any potential IP
  developments for your company. Making sure
  valuable IP is documented and recorded is the
  goal of this identification process. Even while a
  franchise firm would normally place the most
  emphasis on know-how, trademarks, and copyrights,
  ongoing documentation and assessment should cover
  all areas of IP.
• After doing this identification procedure,
  franchisors should review their model franchise
  agreement to make sure it specifies the elements
  of the franchisor's IP that franchisees may
  utilise. Uncertainty results from inadequately
  defining the intellectual property (IP) that
  franchisees are allowed to use, but perhaps more
  crucially, it may lead franchisees to doubt the
  IP's worth, which could reduce their interest in
  investing in the franchise network.

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2. Protecting your IP

• Failure to immediately protect and register their
  IP is another frequent problem for franchisors.
  This generally becomes a problem when the
  franchisor wants to sell its company or wants to
  geographically extend its network, for example,
  because third party rights restrict access to
  markets.
• The inability to stop third party copycat
  enterprises will be another problem brought on by
  a failure to safeguard IP across jurisdictions,
  in addition to market access. The bigger the
  scope to pursue such rights against allegedly
  infringing third party use, the more IP rights
  you have discovered and documented, including
  both registered and unregistered rights.

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• Make sure all valuable intellectual property is
  secured, paying close attention to the brands in
  use, where they are already used, and where you
  would like to expand their usage. Register any
  trademarks that are crucial to the service or
  product that the business is providing. Any
  valuable innovations, designs, or trade names may
  be registered.
• It will also be crucial to continuously record
  the growth of copyright materials and know-how so
  that the firm can determine when these are
  developed and put in place the necessary
  protection systems. Franchisees investing in the
  franchise network will feel more secure as a
  result, which will ultimately raise the franchise
  value as a whole.

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3. Observe and Control Use

• Franchisees and other parties, including third
  parties, who may try to use a franchisor's
  intellectual property (IP) for their own gain,
  may gain access if the franchisor fails to record
  and register (where possible) its IP.
• Certain hazards are unique to franchise
  operations. When franchisors do not strictly
  enforce the rebranding of franchisees' businesses
  upon termination, one such risk concern is the
  possible negative impact on brand value. If the
  former franchise company using the trademark was
  shut down due to customer complaints, fraud, or
  subpar products or services, there is a specific
  risk involved.
• Franchisees also want to see action taken to show
  their valuable access to rights that are
  otherwise unavailable for use by competitors
  where pure third party IP infringement occurs.

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• From an IP standpoint, you can put in place
  watches to help with this, such as domain name
  and general internet watches, competitor watches,
  and register watches for your important brands.
• Try to act quickly where former franchisees are
  concerned. Don't rely on them to self-report on
  this issue personally verify that they have
  fully rebranded before allowing them to depart
  the firm. To preserve the value of the company's
  intellectual property, be ready to take legal
  action against persistent infringement of those
  rights. Other honest franchisees will want to see
  their ownership position in the company secured.
  Additionally, failing to do so could harm the
  reputation of the brand.

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Conclusion

• Based on its valuable intellectual property, a
  franchisor can licence a tried-and-true brand and
  business strategy with a solid reputation and
  established market.
• A strong franchise will continuously examine and
  manage its IP to make sure these important rights
  are preserved and documented. A franchisor must
  actively maintain and suitably safeguard its IP
  in order for a franchise to continue to be
  valuable to both the franchisor and the
  franchisee. Last but not least, franchisors must
  keep an eye on the market to make sure that
  breaches are immediately discovered and dealt
  with. If they are not, the perceived value of the
  franchised firm may be quickly diminished and
  questioned by current or potential franchisees.