Can I franchise a trademark?

A trademark can be licensed as part of a franchise arrangement. However, franchising involves additional federal and state legal requirements beyond trademark law, so professional legal advice may be appropriate when establishing a franchise.

Trademark ownership generally belongs to the person or legal entity that controls the nature and quality of the goods or services sold under the mark. An assignment transfers ownership from one party to another. A license, by contrast, gives another party permission to use the mark while the original owner keeps ownership.

Ownership changes should be documented carefully because trademark rights are tied to the goodwill of the business. 'Goodwill' means the customer recognition and reputation associated with the mark. A trademark generally should not be transferred as an empty symbol disconnected from the business and goodwill it represents.

A trademark license gives another person or business permission to use the mark under agreed conditions while ownership remains with the trademark owner.