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Development and registration of a franchise (Franchising)

The development of a franchise is necessary when the owner has decided to scale his business with minimal investment on his part and with a guarantee of making a profit in the future. This is a form of business organization in which the owner (franchisor) transfers to an independent businessman or company (franchisee) the right to organize a similar business under his own trademark. This business can be associated with the production, sale of goods and / or the provision of services for a fee in exchange for compliance with the rules of doing business – a franchise package.

What conditions are needed to create a franchise?

  1. An authoritative, well-established brand on the market.
  2. Clear methods, technology of work, certain know-how or intellectual portfolio of the business as a whole.
  3. Well-coordinated team, proven over the years.
  4. Reliable suppliers and contractors.

Legal services for franchising is one of the priority areas of work of the SION patent law firm. Our specialists help with paperwork. They carry out the protection of intellectual property, prepare rules, standards for doing business, as well as methods and conditions for working on interaction within the network of the franchise object.

The leading lawyer of the practice recommends conducting a comprehensive Due Diligence before starting to draw up a franchise agreement in order to identify possible unprotected rights and prevent the risks of losing a business.

Franchise development price

The documentary guide to starting a business is about the rules and other requirements of running a business. They are carefully detailed so that the franchisee does not have any questions about where to purchase raw materials, which premises to choose, and how to act in a given situation.
The cost of our services is formed taking into account the creation of the manual, the preparation of the franchise agreement and legal support of the transaction.

The sections included in the manual, the prices of services are presented below:

ActionsVolumePrice, USD
Corporate identity, object design and merchandising,
from 30 pagesfrom 1000
Personnel Managementabout 100 pagesfrom 500
Business processes100 pagesfrom 1000
Business start-up instructionsfrom 25 pagesfrom 600
Financial model of a franchisefrom 20 pagesfrom 2000
Control and reporting standards in the trade networkfrom 20 pagesfrom 1000
Marketing Standardsfrom 10 pagesfrom 800
Juristic documentsfrom 40 pagesfrom 1000
Total amountfrom 7900

Before starting cooperation, we always sign a non-disclosure agreement for confidential and commercial information.

Franchise registration

Ukrainian legislation does not provide such rules for state registration of franchise agreements. However, given that this transaction is a type of licensing transaction, the right to transfer industrial property for use can be entered into the State Register. These are managed by the National Intellectual Property Authority.

A prerequisite for registration is the presence of registered objects of intellectual property rights, these are:

  • trademark;
  • industrial model;
  • invention or utility model.

The procedure for state registration of a commercial concession agreement

A franchise agreement is often referred to as a commercial concession. Despite the fact that the nature of these contracts is quite similar, they still differ. Thus, a concession is more often used in the transfer of rights of use to various industrial facilities, highways in order to modernize facilities and make a profit by both parties. It has been concluded for a long time. Active communication between the parties is not part of the contractual relationship.

Within the framework of franchising, it is assumed constant communication between the franchisor and the franchisee, exchange of experience and control over the implementation of rules and business standards. After all, not only a well-known brand is transferred for use, but also its reputation, which has been accumulated over the years. If not carefully monitored, reputation can be damaged, resulting in financial losses.

To prevent such risks, it would be appropriate to register a franchise agreement.

The document approving the procedure for registering commercial concession agreements is being prepared taking into account the branch of the subject.

Our specialists carry out state registration, add objects of intellectual property rights to the Register, prepare relevant draft agreements and accompanying documents, and professionally conduct negotiations with the parties.

Royalty in the franchise

Based on the research of the International Franchise Association (IFA), the world traditionally uses the following approach to payments within the framework of franchising:

  • The lump-sum fee is a one-time payment-greeting, it is made as a guarantee of fair use of the trademark of another IP, compliance with the rules and standards.
  • Royalty – periodic payments (once a month, quarter or year), they are a specific percentage of revenue, can be fixed or mixed.

Royalty rates depend on many factors, such as the business industry, country or region where the franchise is used, competitive advantage, and so on.

To determine the optimal royalty rate, an assessment of intellectual property rights is most often carried out. Our experts will conduct an assessment at a high professional level and in the shortest possible time. We have been working for over 11 years, the average professional experience of a certified appraiser is 20 years.
The advantage of contacting us is a qualified, professional preparation of business rules for franchising, a draft agreement, an assessment of the cost of a franchise, registration of intellectual property rights, and other legal and consulting services.

To order the service, write to info@sion.ua