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What is the Role of Patents in Franchising?

The other day we talked with a business owner business was centered on a unique product that he created. He had a dilemma. He wanted to patent his “widget” AND he wanted to franchise his business, but he didn’t know which one to do first! Let’s discuss the role of patents in franchising.

What is a Patent?

Okay, first, let’s clarify what is a patent. According to The United States Patent and Trademark Office (USPTO), a patent is an intellectual property right granted by the Government of the United States of America to an inventor “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time in exchange for public disclosure of the invention when the patent is granted.

Needless to say, the whole idea of patenting is something that our caller had already discussed with his patent attorney to determine its viability. And, yes, he recognized that there would be a cost and sometime associated with patenting. With that said, we informed this business owner that patenting his product was NOT required to be completed, or even started, before franchising his business (read about the requirements to franchise). Thus he could move forward on franchising his business and handle patenting his “widget” in parallel with franchising, or even as a follow-up activity.

That’s right. It is not necessary to have a patent in process when creating a franchise system. Furthermore, it is not uncommon as a franchise system grows, that a franchisor may identify something that is patentable and he/she would then determine whether to invest the time and money to go down the patenting path (check out other ways to bring value to your future franchise system).

NOTE: As part of our franchising process, if a business does have something patentable, then The Franchise Maker has specific patent attorneys who can get it done!

Anytime a franchise business has something that is unique (whether patented or not), it makes the brand more valuable. Patent or no patent, the methods, techniques, processes, products and equipment of a system are treated as confidential within the franchise relationship with its franchisees. In other words, the business owner is fully protected.

What About Trademarking?

Yes, trademarking does play a role in franchising. When you are looking to franchise your business one the first things we will do with you is work on trademarking. When we talk about trademarking that means we want to protect your logo (called a design mark) and the name of your business (called a word mark).  Just because you have been using your name for a while does not mean you own it. You will have to take steps to protect your name (and logo) so that you are able to enforce your rights if other people try to use your name (or logo). When looking to file a trademark it can be very complicated and we HIGHLY recommend you use an attorney that specialized in trademarks.  Be careful just because you are talking with an attorney does not mean that attorney specializes in trademark mark work (see this article “Attorneys it is Hard for The to Admit They Can’t Do It All“).

No worries, when working us to franchise your business we have trademark attorneys who will file the trademarks for you. Trademarking is part of the franchise development process (you can see an overview of the steps to franchise on our How to Franchise page). Rest assured that all our attorneys work at a reduced flat rate only for our clients so you do not have to worry about that infamous bill from an attorney’s office sent with a tube a vaseline.

I Already Have a Patent or a Trademark

On the flip side, just because the business owner has a patent or already has a trademark doesn’t mean that he or she should go out and create a franchise (find out do all businesses make sense to franchise). A franchise business represents a business system, not just a really neat “widget”. In other words, there should be a business built around the “widget”. Everything from how to get customers to executing services is expected to be figured out. That means proving that the “widget” really works, there is a demand for it, and it can be packaged as an entire business system.

So, if your business is already in operation and you’ve been wondering if you need to have a patent first before moving forward, don’t let the concept of patenting thwart you from franchising. Let us help you determine if franchising is even right for your business. And from there we can talk about securing a patent. Call us directly at 1-877-615-5177. We will gladly answer all your questions.

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