Ask a Business Lawyer Blog

Ask a Business Lawyer, Part 3:Trademark License & the "Franchise Box"

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How can I stay out of the “Franchise Box” when licensing my trademark [the mark]?

Franchising is highly regulated and typically, more expensive than licensing.  Here are some ways to reduce the risk of falling into the Franchise Box.

1. Consider licensing the right to identify the business as a member of [the mark], instead of licensing right to identify the business as [the mark].  
2. Prohibit members from using [the mark] as follows:

a. no use of [the mark] in advertisements unless such contains a prominent, clear and conspicuous statement of the business or store name (which is not the mark that you are licensing);

b. no use of [the mark] unless member represents itself only as a Member of [the mark];

c. no use of [the mark]  as a component of a Member's business name, or as a part of any telephone listing or number that is published or otherwise promoted to the public;

(d) no use of [the mark] in any manner including, electronic communications media, such as the Internet (via code or submitted information), as part of a:

(i) company name, trade name or user name
(ii) e-mail address
(iii) Domain name or Uniform Resources Locator (URL)
(iv) meta tag, search engine or indexing information.

d. no use of [the mark] unless the image or letters of [the mark] in such use, is equal to or less than three (3) times the average height of the letters in the business or store name and the location.

For more information on Licensing and Franchising, please click here.

This is NOT a complete or exclusive list of issues that determine whether an opportunity falls outside the scope of Franchise Laws.  There are other considerations, including control over quality or methods, training, etc. that could trigger the application of Franchise Laws to the opportunity.  Consult a business lawyer with regard to your specific situation.

When you are ready to discuss the legal issues associated with your business, click here to contact Michelle L. Grenier, Esq.

Copyright (c) 2011-2012 Michelle L. Grenier, Esq. All rights reserved.