A well-documented deal guarantees flawless development
Franchising is a highly convenient business model with worldwide-proven efficiency. On the one hand, it offers a brilliant opportunity not only to expand the company’s trademark with their partners’ help, but also to get royalties for that. On the other hand, there are prospects of conquering the market with the support of a reputed brand. Legal assistance with the franchise agreement ensures that both parties benefit from the agreement. Such assistance can be provided by experts with years of experience in the field; it is one of the legal services provided by Konsaltika Group of Companies.
Before you commission legal assistance with a franchise agreement, you need to learn about franchising as a business model. Each franchise agreement has two parties: a franchisor and a franchisee. The former is the trademark owner: the company that produces (sells) goods or services. If such company’s management commissions turnkey legal arrangements for the franchise, that will enable them to easily find interested partners.
The other party is a franchisee – an individual (private entrepreneur), or a company. For a fee and on the terms listed in the agreement, the franchisee uses the franchisor’s strong brand. This practice is widely spread all around the world; a lot of well-known brands actively use it, which significantly contributes to the brands’ success.
Here are some examples:
- Phillip Morris – a global tobacco juggernaut;
- Nestlé. There’s no doubt that foodstuff (including, but not limited to baby food) of this trademark can be found in the kitchens all over the world, including Russia, although the company’s headquarters are situated in Vevey, Switzerland;
- McDonald’s. This restaurant chain’s success is a textbook case in the history of franchises.
Each novice entrepreneur seeking business success can become a franchisee. He or she needs to pick an business area and then look for readymade franchises. Experts providing legal support in franchise preparation are the right people for the task.
Must-know for every enterpreneur
Each franchise includes:
- brand and trademark;
- trade secrets. To ensure proper business development, the franchisor has to share those with the franchisee, one way or another.
- franchisee’s manual, or franchise operations manual – a detailed manual of franchise operation, made by the franchisor based on the company’s experience. It provides the franchisee with assistance not only in getting started with the new business but also in developing it while properly and adequately representing the trademark.
The relationship between the franchisor and the franchisee is ratified with a franchise agreement (commercial concession agreement) that lists all terms of the partnership. This stage is essential, which is why it is important to commission legal assistance from professional experts. Seek out Konsaltika that offers legal assistance for brand promotion in Moscow.
Franchisors carefully guard their trademarks and trade secrets. They go to great lengths to ensure that! They even go as far as refusing to disclose the know-hows and creating numerous restrictions and limitations for the franchisees, which greatly complicates their work. That undermines the partner’s chances to manufacture quality products, which, in turn, adversely affects the franchisor’s own reputation and can even cause the company’s downfall.
That is why high-quality legal assistance is essential throughout putting together the franchise. The price of such assistance is hardly very high, but it guarantees that the franchise agreement takes the interests of both parties into account. Its aim is to provide enough support for the franchisee, and at the same time ensure that the franchisor’s requirements, designed to avoid incompetent actions on the franchisee’s end, are met.
Following the law
The agency responsible for registration of trademarks and other elements of franchises in the Russian Federation is the Russian Federal Service for Intellectual Property (commonly known as Rospatent). Main legislative acts that govern the process are the Civil Code of the Russian Federation and the Governmental Directive №1445.
A franchise agreement (commercial concession agreement) governs the assignment for temporary use of:
- know-hows (trade secrets);
- manufacturing standards;
- business names;
- industrial samples;
- digital databases and other intellectual property.
These intellectual property items are handed over to the franchisee according to the franchise agreement – but the franchisor retains exclusive ownership. Even if there is an attempt to alienate them, Rospatent will not support the initiative. To avoid such predicament, commission legal support of your franchising process to a reputable company.
Arrangements before starting a franchise
To make sure that a franchise agreement is valid, before looking for franchisees, a future franchisor has a lot of work to do. First and foremost, there’s brand registration. The future franchisor has to register the brand before starting any business operations. If the company’s brand, logo and other unique assets haven’t been properly registered, the entire franchise can be rendered invalid. To avoid a tremendous amount of problems, secure the backing of an experienced company that provides legal support.
A perfect franchise model implies that the franchisor is interested, above all things, in finding reliable franchisees. They are the ones who help lower the brand owner’s spending on brand development by assuming a significant portion of expenses. New partners provide the franchisor with additional cash infusions in the form of royalties – payments for the use of brand and other intellectual property. All of that ensures growing profits, especially if the trademark is promoted in Moscow (major cities always provide for larger potential client base).
Usually it is the brand owner who performs the legal preparation of the franchise, although in some cases franchisees can do that. This allocation of commitments can be agreed by the parties on a case-by-case basis, and in this, legal assistance is essential and has repeatedly proven its efficiency.
Drawing the application to register a trademark is a complicated procedure, but with legal assistance the process will be fast and correct. Exclusive brand and logo ownership is crucial, so any and all mistakes must be avoided. The price of expert professional legal assistance will pay back multifold.
Seek out the assistance of Konsaltika Group of Companies! Our experts will become fully acquainted with your company’s needs, determine the tasks within your project and fully accomplish them. The company’s employees will ensure that the trademark registration application is filed out in advance. They will also monitor the review and approval process, up until you receive the confirmation of your exclusive rights to the trademark.
Once the company has claimed its rights to the brand and established a successful business, its management can start developing a franchise. The franchise is also to be registered in Rospatent, but before doing so, the future franchisor should form the franchise package that would cover the following issues:
- agreed upon rights and obligations of the parties.
- conditions that are mandatary for the business in question and are to be met according to laws and regulations.
- payment terms and extent. Payments consist of the lumpsum payment and royalties. The latter are payed periodically as commission fee for the use of the trademark.
- other terms and conditions for the parties within the terms of the agreement.
A franchise has to include a franchise operations manual that lists all recommendations for the partner, from requirements for premises and product placement (merchandising elements) to the use of know-hows in manufacturing processes. The demand for a franchise from reliable potential partners highly depends on the quality of the franchisee’s manual. There are a number of websites that assist in finding franchise partners, but before placing the franchise on such websites, the brand owner legally registers it on a turnkey basis. A lot of companies that promote their brands in Moscow prefer commissioning legal assistance to Konsaltika.
Not only the trademark, but also the franchise agreement is to be registered in Rospatent. The use of a franchise is assigned, temporarily or permanently, in accordance to the agreement. At the same time, it is essential for the franchisee to be aware of the following issue: it is not recommended to start business activities before the agreement has passed the Rospatent registration.
For one thing, there is a risk of claims on the side of tax authorities for business activities without appropriate legal registration. For another, some issues may occur on the side of the brand owner, because as the company in possession of exclusive rights, the brand owner is entitled to sever business relations. Only a registered franchise agreement entitles the licensee to legal business activities.
It is highly important for both parties to ensure a secure deal. That is one of the most important reasons to commission legal support during the agreement preparation. Konsaltika can help both franchisors and franchisees. One of the stages during franchise registration is the negotiations with a potential franchisee; this stage is very important for a franchisor. This is when the brand owner ensures the future partner’s commitment. To do that, the franchisor asks a number of questions that help determine the future partner’s competence in the business.
Another important issue to explore within the negotiations is whether the potential franchisee is a “spy” for another company. Quite often competitors arrange for their representatives to visits other brand owners in order to acquire information. In that case the support of experienced experts who help prepare the agreement can be invaluable to void future problems. Skilled experts quickly discover bad faith, thanks to many years of experience in legal assistance.
Vigilance in everything
If potential franchisees intend to start a business in good faith, they are entitled to legal consulting on franchises in their field of interest – in particular, in patent search. Patent search is the acquisition of information about a potential franchisor’s inventions and other intellectual property. The trademark is verified, using:
- combined marks.
Patent information retrieval consists of the acquisition of all possible information in order to prevent intellectual property claims of third parties. At this stage legal support is especially important because this field calls for high levels of proficiency. Patenting is most effective if it is carried out with professional assistance. The price for expert services pays off because sue charges are much higher – that has been proven in practice. Another advantage of experienced professionals is that their legal services on patent issues are provided in strict compliance with laws and regulations, which is an important issue in any business relationship.
Another important stage is the detailed evaluation of the franchise agreement. It is essential to commission this service to experts. They will thoroughly evaluate the document that is to become the basis of a long-term cooperation. The evaluation is comprised of legal assessment of all clauses of the agreement, including the allocation of commitments.
The franchisee’s freedom is an important issue in this kind of cooperation. At the same time, it is essential to ensure the protection of the franchisor’s (brand owner’s) trademark and brand. With the assistance of trained professionals experienced in legal support it is easier to come to an agreement.
Reliable partner won’t disappoint
Konsaltika Group of Companies offers a broad range of services for franchisors and franchisees, helping promote various brands in Moscow, Russia and CIS countries.
At Konsaltika you will find a wide variety of offers. Among the services we provide are the following:
- Assistance in preparation of the trademark license agreement for Rospatent. It needs to be done in accordance with standard procedures.
- Patent search. Industrial samples and other data can be used for that.
- Drawing up the application to register a trademark.
- Putting together a turnkey franchise package, including drawing up all supporting documents, etc.
Konsaltika employs a fully custom-tailored approach to every client and calculates costs accordingly. Besides that, Konsaltika offers legal support through the entire term of the franchise agreement, and that service is in high demand because, unfortunately, not every partnership is flawless. In particular, Konsaltika offers services of claims work. Among such services there are:
- drawing up the claim letter to the authorities, commencement of legal action. That happens when one of the parties discovers the other’s breach of the franchise agreement;
- representation in court;
- responses to claims and suits of the opposite party, etc.
Apart from Evgeniya Zyabkina, Konsaltika employs the following managers:
- Denis Gusev, Head of Sales with over 5 years of experience;
- Tatiana Pominova – Konsaltika’s Key Account Manager. She supervises the company’s website. You can find the list of Konsaltika’s services and prices, as well as a lot of other useful information, on the website;
- Irina Slavinskaya and Irina Fomina – regional representatives. Irina Slavinskaya is responsible for Konsaltika’s work in Ukraine and Irina Fomina for its operations in Krasnodar Krai and the city of Stavropol.
The company’s experts provide legal support for franchises in various business sectors:
- health and beauty;
- education and training;
- manufacturing etc.
Konsaltika has over seventy completed projects under its belt. The company’s key asset is its systematic approach to its work. Konsaltika’s experts consistently follow a clear succession of actions in their work with each client:
- application processing;
- client’s website analysis;
- discussion of the client’s requests;
- business proposal;
- services agreement.
The experts start working right upon the upfront payment receipt. Legal processing and putting together a turnkey franchise package in Moscow with the assistance of Konsaltika takes approximately two months, which is less than Konsaltika’s competitors can offer – and Konsaltika’s services are significantly cheaper. You can easily see for yourself just comparing price lists.
Customer treatment is essential
As Konsaltika works on putting together a turnkey franchise package, the company ensures that the franchisor performed the patenting correctly. Demands of both parties are taken into account and reflected in the agreement. Konsaltika performs legal assessment of the agreement to ensure the compliance of the partners’ business activities with laws and regulations.
Among Konsaltika’s partners there are:
- Remit – meat plants;
- ADAMAS – jewelry factory;
- Kulikovsky confectionary and other well-known brands.
Konsaltika does not only provide brand promotion services in Moscow. The company doesn’t abandon the clients and continues legal support throughout the client’s entire business life. Reviews of grateful clients on the company’s website testify to that. You can commission the company’s services online on Konsaltika’s website.