Trademarks for Proprietary Products—What You Need to Know

January 18, 2016

Franchisors that are serious about developing additional revenue streams in their franchise will ultimately explore proprietary products. By creating new products either under the brand or as a stand-alone entity, franchisors can sell and distribute their own products to franchisees.

An example would be a pizza franchise that sells their pizza sauce to franchisees and the public. This specific sauce adds to the ability to maintain consistency in all locations and additional revenue streams for the franchisor. Selling the sauce as a stand-alone product online, in retailers, and at franchise locations continues to increase revenues.

In order to protect your intellectual property and branding, trademarking your proprietary products should be part of your strategy.

Importance of the Trademark 

The last thing you would want to do is to invest in promoting a brand name only to have your competitor steal the trademark right underneath you. You would lose all the time and energy invested into that product.

Trademarks are about protection and branding control. They give you exclusive rights to use the name in your industry. 

If utilized correctly, proprietary products create brand recognition and help to differentiate you against competitors. You can market your unique product as a reason to visit your business. Sometimes products become better known than the franchise. Either way, this is a win-win. 

As both the product brand and franchise grow, you will slowly add more trademarks to your name. Over time customers evolve the way a brand or products are referred to. By securing these evolutionary trademarks, you protect against any holes in your intellectual property.

To avoid becoming trademark poor, make sure that the trademarks you purchase are good for the business. A trademark should enhance your value in the market through developing additional unique selling propositions.

White Labeling

I often advise young franchises to white label products to build in placeholders for future proprietary products. This allows you to develop the distribution systems and require franchisees to utilize the product of your choosing. The ultimate goal is to replace the white label down the road with your own product.

A trademark in this phase does not make sense. Wait until you have your unique product to develop the brand around and stamp a trademark name on.


Your Partner for All Your Legal Franchise Needs

Proprietary products are just one of the many ways to keep your franchise on the cutting edge. With the innovations in technology and new emerging markets, franchises have incredible opportunities to capitalize on new trends.

Whether it is applying for trademarks or developing your Franchise Discloser Document, I am here to help you with all your legal needs. As a part owner in a franchise, I can help you balance staying innovative in the space with building a strong legal foundation.