In a franchise, the brand is not decoration. The operator needs a defined permission to use it, while the owner needs a practical way to protect consistent use and stop use when the relationship ends. This page addresses that franchise-specific brand licence; it is not a general trademark-transfer guide.
For the overall business route, start with franchise registration in Nepal. For a foreign-provider deal, also review technology-transfer approval.
Confirm ownership before granting use
Identify the owner of each word mark, logo, device mark, trade dress element and operating material that the franchisee will receive. Then compare that ownership record with the party signing the franchise agreement. A licence should not quietly imply that the local operator owns the brand or can register confusing variations.
DOI’s Industrial Property Section publishes separate domestic and foreign trademark-registration checklists. For a foreign mark, the published checklist includes the domestic-list documents plus a certified valid overseas trademark-registration certificate, any priority-date document and a power of attorney/Nepal correspondence address. Those are registration materials, not proof of a general standalone licence-recordal service. See the trademark registration guide for the filing route.
Does a Trademark Licence Need to Be Recorded with DOI in Nepal?
The DOI materials cited for this article publish procedures for trademark registration and, separately, technology-transfer requirements where a foreign arrangement includes trademark rights. They do not establish a general standalone trademark-licence recordal procedure that automatically applies to every franchise licence.
That distinction matters. Trademark registration deals with the protected mark and its owner, while the franchise or licence agreement deals with the franchisee’s permission to use that mark.
For a domestic franchise, the agreement should clearly identify the registered owner, the marks being licensed, the permitted use and the restrictions on that use.
For a foreign franchise, an additional technology-transfer analysis may be required. FITTA section 2(f) includes trademark, licence, know-how and franchise within its technology-transfer definition where the statutory foreign-provider structure applies. DOI’s published technology-transfer materials also call for a valid trademark-registration certificate where the transfer includes a trademark.
The practical approach is to keep the trademark record, the franchise agreement and, where applicable, the technology-transfer approval file consistent rather than treating them as unrelated documents.
Licence versus assignment in a franchise
A franchise licence should identify the permitted use rights while keeping the ownership position explicit. An assignment/transfer asks a different question: whether ownership moves. Keep those concepts separate in correspondence, contracts and brand filings. For the broader distinction, see trademark transfer in Nepal.
The agreement should identify the mark, goods/services or business presentation, Nepal territory, approved locations/channels, duration and any restrictions on modifying the mark. It should also prevent unapproved registrations, domains or social handles built around the licensed brand.
What Should a Franchise Trademark Licence Cover?
A useful trademark licence should make the scope of the franchisee’s permission clear enough that both sides know what is authorised during the relationship and what must stop when it ends.
Trademark Owner
Identify the legal owner of each licensed mark.
Licensed Marks
List the word marks, logos, device marks or other brand assets the franchisee may use.
Permitted User
Identify the franchisee or Nepal operator authorised to use the marks.
Territory
Define the geographic area in which use is permitted.
Locations and Channels
State whether use is limited to particular outlets, websites, delivery channels or other approved locations.
Goods, Services or Business Presentation
Explain the business activities and presentations for which the mark may be used.
Quality Control
Set standards for signage, packaging, menus, marketing materials, manuals and other brand-facing uses.
Advertising Approval
State who approves local advertising, promotions and modifications to brand materials.
Modification Restrictions
Prevent unauthorised changes to the mark or brand presentation.
New Registrations and Digital Assets
Address domains, social-media accounts and attempts to register confusing or related marks.
Sub-Licensing
State whether the franchisee may allow another person or outlet to use the brand.
Fees or Royalties
Identify the commercial basis for any licence or franchise payment where applicable.
Term and Renewal
State when the permission begins, how long it lasts and how renewal works.
Termination and De-Branding
State when use must stop and how signs, listings, packaging, manuals and other materials will be removed, returned or dealt with.
Not every agreement needs identical drafting. The important point is that the trademark permission should match the actual franchise structure rather than relying on a vague statement that the franchisee may “use the brand.”
How to License a Trademark to a Franchisee in Nepal
A franchise trademark licence should be built around the actual brand rights and operating relationship rather than added as a vague clause at the end of the agreement.
- Confirm Who Owns the Trademark: Identify the legal owner of each important word mark, logo, device mark and other protected brand asset. Check that the party granting the licence is consistent with the ownership evidence.
- Check the Trademark’s Nepal Position: Review the available Nepal trademark-registration evidence for the marks the franchisee will use. Where a foreign mark is involved, DOI publishes additional documents for foreign trademark registration, including a certified valid overseas registration certificate and representative documents.
- Identify Exactly What the Franchisee May Use: Specify the marks, logos, signage, packaging, manuals, digital materials and other brand assets covered by the permission.
- Define Territory, Locations and Channels: State where the franchisee may use the brand and whether the permission is limited to particular outlets, websites, delivery platforms or other approved channels.
- Set Brand and Quality Controls: Define the standards for signage, packaging, menus, advertising and other customer-facing uses. State who approves alterations and how the franchisor can require corrections where brand standards are not followed.
- Restrict Unauthorised Registrations and Digital Use: Address attempts to register related trademarks, domains, social-media accounts or confusing brand variations without the owner’s approval.
- Define Fees and Payment Terms Where Applicable: If trademark use forms part of the franchise fee or royalty structure, the agreement should describe the payment basis clearly. For a foreign franchise, the payment terms should also remain consistent with any applicable technology-transfer and foreign-exchange process.
- Plan Termination and De-Branding: State when trademark use must stop and what happens to signs, packaging, online listings, manuals, advertising materials and other branded assets when the agreement ends.
- Check the Foreign Technology-Transfer Position Where Relevant: Where the provider is foreign and the arrangement supplies trademark rights, know-how, franchise rights or related services to a Nepal industry, assess the FITTA and DOI technology-transfer route before treating the licence as a purely domestic brand permission.
- Keep the Records Consistent: The trademark ownership evidence, franchise agreement, permitted-use terms and any applicable DOI technology-transfer record should describe the same underlying rights and transaction.
Quality control is part of usable brand permission
The franchise agreement should say which signage, packaging, menus, marketing materials, manuals and online assets the franchisee may use, and who approves changes. It should set a workable inspection, training or corrective-action mechanism. These are commercial controls, but they matter because a bare permission to use a mark offers little guidance on how the brand should appear in the market.
Also address the operating system around the mark: confidential manuals, recipes, processes, customer data and vendor standards should have their own use and confidentiality terms. The franchise agreement guide covers the wider contract framework.
Foreign mark and technology-transfer interaction
FITTA section 2(f) includes trademark, goodwill, a licence, know-how and franchise within its technology-transfer definition when the agreement is between an industry and a foreign investor. A foreign franchise should therefore be assessed for the technology-transfer route rather than treated as a simple local brand permission.
DOI’s published TTA checklist calls for a valid trademark-registration certificate where technology transfer includes a trademark. That is a document requirement for that transaction type; it does not mean every domestic trademark licence requires DOI approval. For a foreign TTA file, keep the licence description, trademark evidence and agreement consistent.
Termination: plan the last day of use
The agreement should specify the final permitted use date and the steps after termination: removing signs, changing online listings, returning manuals, ceasing advertising, handling inventory and confirming that no new use will occur. A clear exit plan reduces the risk that the business continues to present itself as an authorised outlet.
If use continues without permission, get transaction-specific advice promptly. The trademark infringement guide discusses the related risk.
Brand-licence checklist
- Verify the owner and Nepal trademark evidence for every key mark.
- Define exactly what the franchisee may use, where and for how long.
- Restrict alteration, re-registration and unauthorised digital use.
- Set practical quality, advertising and manual controls.
- Make termination/de-branding obligations specific.
- For a foreign franchise, align the trademark material with the FITTA/DOI technology-transfer analysis.
