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What Rights Does Buying a Franchise Give You?

July 06, 2021
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The American Dream is something that many of us are looking for. Owning your own business is one way to get your piece of that dream. Starting a brand new business can be difficult, and finding success with a new business can be hit or miss.

You have to find the right business, spend the money it takes to start one, and then spend years building a brand. Buying a franchise is considered, by many, to be a shortcut to owning your own business. Don't get us wrong. We're not saying that buying a franchise is a guarantee of success or that it won't require you to put in a lot of hard work.

Business Owner Giving the Thumbs up and Executives Blurry In the Background Celebrating
Like any business, what you put into your franchise is what you'll get out of it. If you want it to be a success, you'll need to work hard at it.

However, some advantages can help you achieve success faster by franchising versus starting your own company. With a franchise, you get brand recognition, tested and proven products and services, and an already established customer base.

What Rights Does Buying a Franchise Give You?

When you buy a franchise, you're really getting the best of both worlds. You're buying a business that you own, but you have a brand backing you.

One of the biggest things you get when you buy a franchise is licensing rights. Licensing rights give you the license to use trademarks, artworks, trade secrets, and other intellectual property that belongs to the franchise. That's the biggest value that comes with the right to use their intellectual property.

That's what consumers are familiar with. And you, as a franchisee, can rely on that to be successful. There are often limitations on how you can use that intellectual property, though.

A Couple In Front of a Franchise Executive Buying a Franchise
The rights you have to trademarks, products, and intellectual property will always be made clear in the franchise agreement. The protection of the intellectual property is one of the main concerns of the franchisor.

As a franchisee, you will be paying ongoing fees and possibly royalties for the right to use the franchisor's intellectual property (IP). As long as you own the franchise and pay the fees, you will continue to use intellectual properties as stipulated by the franchise.

The right to use the intellectual properties is just contingent upon being a part of the franchise and operating the franchise as described in the franchise agreement. If you lose the franchise or sell the franchise, your right to intellectual property will be terminated.

With some franchises, you may be required to sign a non-disclosure as well, which prevents you from discussing the trademark secrets of a company not only while you are a part of the franchise, but usually for a pre-determined time after your association with the franchise ends.

A Starbucks Franchise Showing How a Brand Can Back Up Your Business

Some Things to Remember

  • Buying a franchise doesn't give you ownership of the intellectual property. You can use their trademark content as long as you are associated with the franchise. You have no say in how the franchisor uses their own intellectual property.
  • You can lose the right to use the intellectual property if you do anything that the company deems inappropriate or damaging to the company's reputation or the franchise.
  • Your rights to use the intellectual property may be limited according to stipulations in the franchise agreement. Always know the rights your license include.
  • You will be expected as a franchise owner to uphold a certain standard of behavior and business practices. This is to ensure the integrity of the brand and the intellectual property associated with the franchise.
A Couple Of Business Owners in Front of Their Store Upholding Standard Business Practices

Are You Ready to Buy Your First Franchise?

All USA Franchises is the place to start. We are on a mission to list all 3000 plus franchises in the U.S., dedicated to being the largest FREE directory for franchises anywhere. Whether you are looking for a franchise to buy, an investment opportunity, or you're a franchisor who wants to list a franchise opportunity, All USA Franchises the perfect place to start. We let you start your franchise search by industry or by investment, which makes it easy for you to find the franchise that fits your specific requirements.

If you're looking for advice or franchise resources, we've got you covered there too. All USA Franchises provides you with the informative AUF blog, full of helpful articles and tips for franchisees as well as the latest franchise news. We also provide the latest information about the franchise events you won't want to miss. In addition to the blog and events information, we bring you a valuable resource section that helps you locate franchise advisors, franchise brokers, franchise consultants, franchise financing, franchise developers, franchise lawyers, and those specialized in franchise training services. These resources will save you time and can provide you with additional franchise help when you need it. Learn everything you need to know about your rights as a franchisee and what intellectual property rights come with buying a franchise.

Don't forget to visit our social media profiles, where we always keep you up to date with the newest franchise opportunities and franchise news, along with franchising events you might find helpful. There's no better way to stay on top of what's new in the industry. Let All USA Franchises be a part of your road to success.

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Category: Franchise Legal
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