There is lack of a well thought out franchising arrangement that can lead to potential disputes among the parties and here are a few pointers to minimize its commercial and legal risks:
1 Licensing and Use of Intellectual Property Rights (“IPR”): IPRs are an integral part of franchising and involves license of a trade mark, copyright, patent, design or trade secrets. Lack of clarity can lead to open issues such as what is the intended scope and purpose of the license, whether any exclusivity of use is granted and if yes, is it limited to a geographical area or a product/service, is the license for a fixed term andj liable for automatic renewal, what are the post termination rights and obligations related to unauthorized use of IPR and many more such issues. India has a host of IPR related laws such as the Trade Marks Act, 1999, Copyright Act, 1957 etc., that provide for extensive protection and enforcement mechanisms for IPRs and it is in the best interest of both the parties to carefully cover the essential terms in a franchise agreement.
2 Exclusivity and Territorial rights: Another open issue that sometimes create heartburn is on the exclusivity rights of the franchisee as to the territory, goods and services that can be provided, applicable sales channels etc. Territorial and sales channel exclusivity are extremely significant considering the commercial implications on the franchisee, especially if the franchisor requires payment of a minimum assured return.
この記事は The Franchising World の August 2022 版に掲載されています。
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この記事は The Franchising World の August 2022 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
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