Trademark is a word, name, symbol, design, or combination thereof that identifies and distinguishes the goods of one business from those of others. It represents the brand identity and reputation of the franchisor. In franchising, a Trademark is one of the most valuable assets of the system and is licensed to franchisees for use under the Franchise Agreement.
In franchising, a Trademark is a legally protected brand identifier that helps consumers recognize the origin and quality of goods associated with a particular franchise system. Trademarks can include brand names, logos, slogans, or distinctive designs. They serve as symbols of consistency and quality, representing the goodwill and reputation that the franchisor has built over time. Trademarks are registered with the U.S. Patent and Trademark Office (USPTO) under the Lanham Act, giving the owner exclusive nationwide rights to use the mark in connection with specific goods. Franchisees are granted limited rights to use the franchisor’s Trademark during the term of their Franchise Agreement, provided they comply with brand standards and operational requirements. Misuse or unauthorized use of the Trademark constitutes infringement and can lead to legal action or Termination of the franchise relationship.
Additional Definition: Any word, name, symbol, or device or any combination thereof adopted and used by a franchisor to identify its goods and/or services and distinguish them from those manufactured or sold by others. A careful franchisor grants only clearly defined or restricted use of its 'trademark'. Such restrictions are spelled out in the franchise agreement and are therefore commonly referred to as “contractually limited use” of the 'trademark'.
The concept of the Trademark dates back centuries to artisans marking their goods for recognition and quality assurance. In the U.S., federal protection for Trademarks began with the passage of the Lanham Act in 1946. As franchising expanded in the mid-20th century, Trademarks became central to franchise law and marketing strategy. Franchisors realized that their brand symbols—names like “McDonald’s,” “Subway,” or “7-Eleven”—were their most valuable assets. Today, Trademarks are not only a marketing tool but a legal foundation of franchising, ensuring uniform brand presentation and consumer trust across all franchise locations.
Also See: The Educated Franchisee, 3rd Edition
From a legal standpoint, a Trademark is essential to the franchise model because it distinguishes the franchisor’s brand and binds the franchise network under a single identity. The franchisor must own, control, and monitor the use of its Trademarks to maintain federal protection. This includes ensuring that franchisees follow brand guidelines, use approved logos and signage, and maintain the quality associated with the mark. The Franchise Disclosure Document (FDD) requires franchisors to disclose all registered and pending Trademarks in Item 13. Upon Termination or expiration of the Franchise Agreement, the franchisee must cease using all Trademarks immediately to avoid consumer confusion or legal claims. Maintaining control and consistency over Trademark use is fundamental to preserving its legal validity and market value.
| Type | Description |
|---|---|
| Word Mark | A brand name or slogan expressed in text (e.g., “Dunkin’ Donuts,” “Just Do It”). |
| Design Mark | A logo or graphic symbol associated with the brand (e.g., the Starbucks siren logo). |
| Composite Mark | A combination of words and designs used together. |
| Sound Mark | A unique sound that identifies a brand (e.g., NBC’s three-tone chime). |
| Color or Shape Mark | Distinctive use of colors or shapes that function as a brand identifier (e.g., Tiffany blue boxes). |
| Party | Rights and Obligations |
|---|---|
| Franchisor | Owns and maintains the Trademark, enforces proper usage, and protects it from infringement. |
| Franchisee | Has a limited, non-transferable license to use the Trademark only as permitted by the Franchise Agreement. |
| Franchise Agreement | Specifies how the Trademark may be used, displayed, and protected within the franchise system. |
| FDD (Item 13) | Requires disclosure of registered, pending, or disputed Trademarks associated with the franchise system. |
| USPTO | Registers and enforces national Trademark rights under the Lanham Act. |
'The franchisor’s registered Trademark identifies the brand and ensures consistent recognition across all franchise locations.'
'Franchisees are licensed to use the Trademark only in the manner approved by the franchisor and described in the Franchise Agreement.'
'Unauthorized use of the Trademark after Termination may constitute infringement under the Lanham Act.'
| Category | Trademark | Service Mark | Trade Dress |
|---|---|---|---|
| Definition | Identifies goods or products sold under a brand. | Identifies services provided under a brand. | Protects the overall visual appearance and design of a business or product. |
| Registration | Registered with the USPTO for goods. | Registered with the USPTO for services. | May be registered if distinctive and non-functional. |
| Legal Protection | Lanham Act and common law. | Lanham Act and common law. | Lanham Act Section 43(a). |
| Example | “BURGER KING®” for sandwiches. | “BURGER KING®” for restaurant services. | Restaurant décor, color schemes, and layout. |
| Franchise Relevance | Core identifier of franchisor’s goods and branding. | Used to market services offered by franchisees. | Ensures consistent look and feel across all franchise locations. |
A Trademark is the legal foundation of a franchise’s brand identity, representing the franchisor’s name, logo, or design that distinguishes its goods from others. It provides exclusive rights, legal protection, and consumer recognition—ensuring consistency, trust, and long-term value across the entire franchise system.
