Trademark Registration for Franchises Operating in Nepal
The IP architecture of franchising in Nepal — registering the brand system, structuring master and unit licences, recordal, royalties and the FDI layer that sits underneath.
A franchise is a brand, licensed. Every other element — the operations manual, the fit-out, the supply chain — hangs off that license. In Nepal, where franchising has grown across F&B, education, retail and services, the brands that franchise well are the ones that registered before they licensed.
This guide covers the IP architecture: what to register, how to structure the licences, and the recordal-plus-exchange layer that makes royalties lawful and enforceable.
In short
Franchising in Nepal rests on a registered brand system: the house mark, sub-brands and trade dress registered in the classes that match the franchise operation before any unit opens. Licences to master franchisees or unit operators should be recorded at the Department of Industry (Section 21D, NPR 2,000 per mark), with quality-control clauses, defined scope and royalty bases concrete enough for banking use — royalty remittance abroad runs through FERA/NRB procedures on the licence documentation. Where the franchise involves foreign investment or technology transfer, the FITTA layer applies. Watch the register continuously: franchise brands attract lookalike applications, and the 90-day opposition window is the cheap defence.
Register the system, not just the name
A franchise trades on a bundle of signs: the house mark, the sub-brands (product lines, loyalty programs), the logo and trade dress, sometimes a tagline. The registration program should cover the bundle in the classes that match the operation — the core goods/services class, plus retail services (35), the classes of any packaged products sold, and where relevant the delivery and hospitality classes. Nepal's one-class-per-application rule makes this a portfolio, filed deliberately: core first, adjacents as the system actually operates.
Two franchise-specific filings earn their fees repeatedly: the composite mark (logo-plus-word as consumers meet it on signage), and the trade dress elements of the store identity that customers genuinely use to identify the source. Both anchor enforcement against the franchise failure mode — ex-operators and imitators trading on the look.
- House mark + sub-brands + composite + trade dress, in operating classes
- Core class first; adjacents follow the actual system
- Registered before the first unit — licensing an unregistered brand licenses nothing
Legal references
- Patent, Design and Trade Mark Act, 2022 (1965) — English translation (PDF) — WIPO Lex
- Department of Industry — Industrial Property Section — Government of Nepal
Licensing structure: master and unit
The licence chain in a Nepalese franchise usually runs franchisor → master licensee → unit operators, or franchisor → units directly. The IP drafting constants, whichever the shape: defined use rights (which marks, which classes, which territory, exclusive or not), quality control (the supervision right that keeps the licence genuine and the brand intact), termination effects (marks cease on termination — with de-branding obligations and a timeline), and no-registration clauses (the licensee may not register any franchise mark; the classic Nepal failure mode, covered in the foreign-brand guide, applies with equal force to local masters).
Recordal (Section 21D) is the step that makes the licence real against the world: it evidences the authorised use, supports enforcement against unlicensed operators, and — for the licensee's use to accrue to the proprietor under Section 18C — puts the use on the record. Unrecorded franchise licences are the norm here; recorded ones are the advantage.
- Scope, territory, quality control, termination effects, no-registration clause
- Record every licence in the chain that matters
- Recorded licences: enforcement power + Section 18C use coverage
Royalties, recordal and repatriation
Franchise fees and royalties crossing borders run through the exchange-control layer: FERA/NRB procedures at the licensee's bank, on documentation that includes the licence agreement, its recordal, and the applicable approvals (and, where the franchisor has invested, the FITTA frame). The drafting that banks process: royalty formulas stated concretely, terms aligned with the registration calendar, and withholding-tax positions confirmed before the first remittance.
The linkage deserves emphasis: an unrecorded licence jeopardises royalty repatriation in practice, because the bank's file shows payments with no registered-right anchor. Franchisors who record the licence at the DOI and align the banking documentation get a remittance chain that runs itself.
The enforcement and watch program
Franchise brands attract imitators — and the register is where imitators start. The standing program: a watch on the Bulletin screening for the house mark, sub-brands and transliterations; oppositions filed inside the 90-day window (the cheapest enforcement the system offers); market-level monitoring through the franchise network itself, whose operators see lookalikes first; and escalation through DOI complaints or courts for the copyists who ignore letters.
The franchise network is also the use-evidence engine: every unit's signage, packaging and invoices is Section 18C use evidence and acquired-distinctiveness material. A franchisor who collects it systematically is building the file that protects the system — for renewal, for disputes, and for the eventual sale of the franchise business itself.
- Watch the Bulletin; oppose inside the window
- The network reports lookalikes; collect its use evidence systematically
- Escalate: DOI complaints, courts, customs for imported copies
Want this handled for your brand?
IP Watch monitors new trademark publications in Nepal and alerts you to potentially conflicting marks — with the context needed to review them.
This article is general information, not legal advice.