The Master Franchise Agreement (AMF) is a kind of franchise agreement that gives the franchisee master the right to own and operate more than one entity (so-called unit) and the right to subdivide the right to open units to other independent companies (franchises) for a period of time in a given area. As a lawyer, I rarely find a time when I do not defend either party in negotiations before a new master-franchise relationship. When I heard many times at the recent annual meeting of the International Franchise Association about an alignment of the franchise system by a number of franchisor executives, I realized its importance in a new master`s relationship, in which the franchisor will look, at least initially, at the potential champion that will essentially be its franchise system in a foreign country. To this end, it is useful to examine the most important aspects of a new master`s relationship and where it is essential that the interests and expectations of the parties be coordinated. 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. As a general rule, a master franchisor grants the principal franchisor or sub-right the right to third-party transactions within a given territory. And then, on regional issues, Lower Franconia will play the role of franchisor, but they will not or will not generally operate the franchise.