MEXICO Trends and Developments Contributed by: Gustavo A. Alcocer, Luis Astorga, Isabella Montero Torres and Fernanda Martínez Zolezzi, OLIVARES
The development of digital commerce is particu - larly relevant. Mexican regulators have increasingly focused on the operation of online markets and the protection of consumers in digital transactions. These developments are relevant to franchising even where the franchise itself is not a digital business. A franchisor that operates a centralised website, mobile application or marketplace account may affect the ability of individual franchisees to sell through com - peting channels. Similarly, a franchisee may expect to benefit economically from online orders generated within its territory, while the franchisor may wish to retain control over national e-commerce operations. As a result, a modern Mexican franchise agreement should be viewed as more than an instrument for licensing a trade mark and related know-how and col - lecting royalties. It should establish a framework for managing physical and digital operations, intellectual property, territorial rights, technology, data, supply chains, marketing, quality control and changes to the business model. Intellectual property: protecting the franchise before launch Intellectual property is the foundation of most fran - chise systems. The trade mark is generally the most visible component of the franchise, but the value of the system may also depend on proprietary manu - als, recipes, designs, software, marketing materials, domain names, know-how and other confidential information. The LFPPI regulates trade marks and related intel - lectual property rights, while the Mexican Institute of Industrial Property ( Instituto Mexicano de la Propiedad Industrial , or IMPI) administers the relevant registra - tion and enforcement system. Before launching a franchise in Mexico, an international franchisor should confirm that the principal marks are protected in Mex - ico and that ownership is properly aligned among the relevant entities. Copyright in manuals, software and marketing materi - als is governed separately by the Federal Copyright Law, while confidential know-how may also qualify for protection as an industrial secret under the LFPPI.
This is particularly important where the brand owner, franchisor and regional master franchisee are differ - ent companies. The agreement should clearly identify which entity owns each relevant intellectual property right and which entity is authorised to licence it to the Mexican franchisee. Intellectual property protection is also becoming broader as franchise operations become increasingly digital. Franchise systems should consider ownership and control of domain names, social-media accounts, online advertising accounts, customer-facing applica - tions, digital content and proprietary technology. The parties should also establish what happens to these assets when the franchise relationship ends. Digitalisation and the rise of omnichannel franchising Perhaps the most significant commercial develop - ment affecting franchising is the transition from a purely physical franchise model to an omnichannel model. A customer may discover a brand through social media, place an order through the franchisor’s web - site, pay through a centralised platform, have the product prepared by a local franchisee and receive it through a third-party delivery service. Each step may involve different contractual relationships and different legal responsibilities. This creates questions that traditional franchise agree - ments often do not adequately address. For example, who owns the customer relationship? Who receives the revenue? Is the sale attributed to the franchisee whose territory contains the customer, the location that fulfilled the order or the franchisor operating the online platform? Who bears responsibility for refunds, complaints and delivery failures? These questions should be expressly addressed. Territorial rights in a digital environment The geographical territory is one of the matters that must be addressed in a Mexican franchise agreement. Historically, territorial provisions focused primarily on physical premises and restrictions on opening com - peting locations. Digital commerce has made these provisions considerably more complicated.
44 FRANCHISING 2026
C HAMBERS.COM
Powered by FlippingBook