Franchise Operations

Looking for a Franchise? Here’s What You Should Know about Trademarks

One of the most important things a franchisee gets from a franchisor is the right to use a trademark. You can’t open your own burger joint and call it “Burger King” in order to get a great jump on marketing. You can only call your restaurant “Burger King” if you have a franchise agreement with the owner of the trademark.

So what exactly is a trademark?

Archaeologists have found pottery from Ancient Greece and Ancient Rome with marks on them showing the identity of the potters who made the pieces. These were probably the earliest trademarks. However, there is no evidence that they had any legal force. They might have been a sign of pride in the goods, like a signature on a painting, or they might have had some marketing value. We can imagine the early Roman admiring a piece of pottery and, seeing the mark of the potter, going back to that potter to buy a similar piece.

In the 10th century, “makers marks” were put onto goods so that they could be identified if they were stolen by pirates or if a dispute arose about ownership. These marks were a lot like the brands ranchers put on cattle, but they could also have had a marketing component.

As tradesmen began to get together to form guilds, marks were put on things made by a master cheesemaker or goldsmith to show that these goods were high quality items produced by a master according to the rules of the guild. The marks may still have had other purposes, but they definitely were intended to give buyers confidence.

As the guilds became less important (though they still exist in many countries), individual businesses developed their own marks and worked to connect those marks with the quality of their work. These marks helped distinguish one company from another, but they had less legal force than the guild marks until April 20, 1803, when the first trademark law was passed in France.

This law made it a crime to use someone else’s trademark. A few years later, France followed up with a law allowing businesses to register their trademarks, rather than having to prove ownership through their history of use. The United States started passing trademark laws in 1870, but conflicts between these laws and patent law got in the way, and early laws were quickly repealed. In 1905, England passed their trademark law, and they refined it repeatedly until in 1938, they had the trademark law that became the foundation of U.S. trademark laws.

July 5, 1946, marked the first comprehensive trademark law in the United States. The Lanham Act, as it was known, set out most of the rules we follow today, and was most recently updated in 1988. It allows businesses to apply for protection of their trademark in start-up stages, before they start using it.

A trademark can be a name, word, logo, or other identifying mark that distinguishes your goods and services (in which case it is technically a service mark) from other companies’ goods and services. Not everyone registers their trademark, but they may be protected by other laws on intellectual property.

So centuries of custom and law stand behind the value of a trademark, and it shouldn’t be overlooked as one of the main items of value you receive when you invest in a franchise business opportunity.

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