Intellectual Property and the Franchising Business Model

IP and the franchise business model are inextricably linked.  IP protection offers franchisors a way to protect their business’s intellectual assets from being copied or exploited without a licence and therefore mitigate the commercial risks inherent to pursuing a franchise business model.

Certain IP rights are acquired automatically as a consequence of operating the business, whereas other IP rights require the owner to undertake a formal process of application and registration.  Of particular relevance to franchisors are low-cost or no-cost forms of IP protection, namely designs, copyright, and trademarks.

Recent changes in UK Corporation Tax have created a renewed interest in seeking patent protection in order to benefit from a reduction in corporation tax on IP-related profits.  So whether it is for business protection purposes or financial gain, IP offers entrepreneurial franchisors the assets with which to implement, execute, and ultimately realize value from their business strategy.

 

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