The second pillar of a strong franchise master structure is that of the brands that are granted by the franchisor. Unlike the aforementioned territorial issue, the parties generally do not take the same position. The potential master wishes to obtain assurance that the trademark or trademark at issue is available and registered for use in the territory before paying the franchisor some kind of master franchise fee. In the meantime, franchisors are often reluctant to spend the funds to register such trademarks until they know that the potential master has signed a franchise master contract or has otherwise committed to move forward. To guide the parties, we recommend a middle ground. First, the franchisor receives and verifies a research report for primary brands to find that there are no confusing marks that are already used in the territory and gives these observations to the potential captain before signing. Second, the parties agree that the franchisor does not provide any other information about these marks than what it found or did not find in the report. Finally, when the parties decide to proceed, they allocate the costs associated with the approval of trademarks registered in the rights of the territory. Regardless of how the parties agree on trademark protection, the franchisor should, rightly, own the trademarks and all listings that hold a master franchise license. a franchise master contract is a contract that is executed by and between a franchisor and a franchisee, with the franchisor granting the franchisor rights to the franchisee and the licence to (i) use and exploit intellectual property rights, including, but not limited, to trademarks, manuals and “know-how” (franchise system) to develop, establish and operate franchised units in a given territory; and (ii) to sublicensing and sublicensing the trademarks and franchise system for the operation of franchised units in the territory. In addition, the franchisor provides technical assistance to the franchisee in the franchise business and the franchisee provides technical assistance of this type to its under-franchised. The franchisor may receive additional protection when a franchisee does not meet one of its obligations, if it leases or sublets the premises in which the franchise business is operated. This means that the franchisor is authorized to evict the franchisor from the premises, particularly if the termination provisions are included in the lease and franchise agreement.
However, this alternative should not be used by foreign companies as franchisees, as it may have adverse tax consequences; it is more aimed at Mexican companies that act as franchisors. The main difference between sub-franchise, master franchising and development agents is that sub-franchised and master-franchise agreements grant a license and franchise for the use and exploitation of intellectual property rights, as well as technical assistance and know-how. In the meantime, development officers are putting in place an agency agreement that does not provide a license or franchise.