Mark Brutzkus was recently featured in the 1851 Franchise article, “Chapter 7: Protecting Your Intellectual Property,” which reinforces the importance of robust IP protection for franchisors.
Mark explains to 1851 Franchise, “Intellectual property rights, specifically trademarks, patents, copyrights, and trade secrets, are at the heart of a franchise agreement… In a franchise agreement, it is important that the franchisor is the owner of, or has the legal right to use, the franchise’s intellectual property, including trade names or trademarks. Also, it is critical that the franchise agreement contains provisions to keep trade secrets, i.e. ingredients of a secret sauce, confidential and not disclosed.”
“The primary issue is that business owners may overlook the importance of IP,” Mark notes. “The ownership of IP rights prevents third parties from reproducing the franchise business model, which allows the franchisor to be paid royalty payments from the franchisees. Another noteworthy factor is that based on the nature of the franchise, a critical component of the franchise agreement may be maintaining the confidentiality of trade secrets that help create brand value.”
Mark urges franchisors to retain IP counsel to protect the various assets that make their franchise unique. He also recommends regular monitoring of “franchisees’ use of the franchise’s intellectual property to ensure it falls within the scope of the franchise agreement.” If found violating the franchise agreement, a franchisor could then seek damages associated with the violation.
