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Intellectual Property Bulletin

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BOLIVIA, COLOMBIA, ECUADOR AND PERU

TRADEMARKS ARE AN ESSENTIAL ASSET IN THE FRANCHISE AGREEMENT

In Bolivia, Colombia, Ecuador and Peru the rules allow the creation of franchises. The franchise is a contract by which the franchisor grants a license for the use of a trademark in a specific territory to a person, called a franchisee, who obtains authorization to manufacture and/or sell the goods or services identified with that trademark, and under clearly defined standards (know-how) in order to maintain the image and prestige of the trademark.

 

Through the franchise agreement, the franchisor will be able to strengthen its brand, increase its sales and penetrate new markets. On the other hand, the franchisee will have access to an established company’s business in exchange of paying a royalty to the franchisor.

Without a brand there can be no franchise, therefore the importance of having this asset properly protected is crucial. In some countries, like Peru and Colombia, the right to a trademark is obtained by the registry before the competent authority.

Nonetheless, regardless of the registration system, a protected trademark will grant its holder the following prerogatives: i) distinguish their products or services in the market; (ii) prevent third parties from using an identical or similar trademark to that registered. In addition, a registered trademark can be an important tool for its owner, enabling it to grant licenses or as a part of a franchise agreement.