Covenant Chambers has an extensive legal practice in the areas of licensing, franchising & trading, and advising clients for the government policy of framework, compliance and regulatory, tax and other legal issues, industry specific contractual. Our members regularly consult clients on foreign investment and regulations for trading activities, trademark collaboration & technicality in India and repatriation structures.

Licensing Agreements: Protect Your Intellectual Property and Business Interests

Licensing agreements are vital tools for businesses seeking to protect their intellectual property (IP) while allowing others to use it under defined terms. Whether you're licensing patents, trademarks, copyrights, or trade secrets, our team of experienced attorneys can guide you through the complexities of drafting, negotiating, and enforcing licensing agreements.

What is Licensing?

Licensing involves granting permission for another party to use your intellectual property under specified conditions. This could include allowing another company to manufacture, sell, or distribute products using your patented technology, trademark, or copyrighted content.

Why Licensing Matters?
  • Revenue Generation: Licensing enables you to monetize intellectual property without giving up ownership.
  • Brand Expansion: License your brand to increase market reach without the direct costs or risks of expanding yourself.
  • Legal Protection: Licensing agreements provide legal protection against misuse, unauthorized use, or infringement of your intellectual property.
Our Licensing Legal Services Include:
  • Drafting and reviewing licensing agreements
  • Negotiating terms and conditions
  • Structuring royalty and fee arrangements
  • Defending and enforcing your rights
  • Resolving disputes related to licensing
Franchising: Navigating the Complexities of Franchise Law

Franchising is a business model that allows you to expand your brand and operations by partnering with franchisees. However, franchising comes with a unique set of legal challenges, including compliance with franchise laws, franchise agreements, and intellectual property protection.

What is Franchising?

Franchising involves a franchisor granting a franchisee the right to operate a business using the franchisor's trademarks, business model, and support systems. In return, the franchisee typically pays an initial franchise fee and ongoing royalties.

Key Legal Considerations in Franchising:

  • Franchise Disclosure Document (FDD): A critical document that outlines the terms of the franchise relationship. Our attorneys help ensure that your FDD complies with federal and state regulations.
  • Franchise Agreement: This legally binding contract sets forth the rights and responsibilities of both parties. We work with both franchisors and franchisees to ensure the terms are fair and clearly defined.
  • Franchise Compliance: We provide guidance on franchise law compliance, ensuring that both franchisors and franchisees meet legal requirements, including registration and disclosure obligations.
Our Franchising Legal Services Include:
  • Drafting and reviewing franchise agreements
  • Assisting with franchise registration and compliance
  • Franchise dispute resolution
  • Protecting intellectual property (brand, trademarks, and proprietary systems)
  • Franchise expansion strategies
Trading: Legal Guidance for Business Transactions and Trade Regulations

Trading—whether domestic or international—requires a clear understanding of the legal regulations that govern commercial transactions. From cross-border agreements to import/export regulations, our attorneys provide comprehensive support to ensure your business is compliant and well-positioned in the marketplace.

What is Trading in Business Context?

Trading refers to the buying and selling of goods and services, whether within a domestic market or across international borders. The process involves complex legal frameworks, including contract law, international trade law, tariffs, and customs regulations.

Why Legal Guidance Matters in Trading:
  • Contract Negotiation and Drafting: Ensure that your commercial agreements are airtight and protect your interests.
  • Regulatory Compliance: Stay compliant with national and international trade laws, including customs, tariffs, and trade sanctions.
  • Dispute Resolution: Minimize risks by having effective legal strategies in place to resolve conflicts arising from trading agreements.
Our Trading Legal Services Include:
  • Drafting and reviewing trade agreements and contracts
  • Advising on international trade regulations and compliance
  • Import/export compliance, including customs laws
  • Representing clients in trade disputes or litigation
  • Assisting with trade finance and payment issues

ACTS & RULES ON LICENSING, FRANCHISING & TRADING

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LICENSING LAWS

Licensing in India is often sector-specific and governed by various regulatory authorities. Here's a breakdown:

  1. Shops and Establishments Acts (State-wise)
    • Mandatory license for all commercial establishments.
    • Regulates working hours, holidays, employee rights, etc.
  2. Trade License (Municipal Corporation Rules)
    • Required for operating businesses (e.g., restaurants, factories, shops).
    • Issued by local municipalities or panchayats.
  3. FSSAI License – Food Safety and Standards Act, 2006
    • Mandatory for businesses in food manufacturing, packaging, storage, and retail.
  4. Drugs and Cosmetics Act, 1940
    • Licenses required for manufacturing or selling drugs, cosmetics, and medical devices.
  5. Arms Act, 1959
    • Licensing of firearms and ammunition (for businesses like private security).
  6. Factory License – Factories Act, 1948
    • Mandatory for units involved in manufacturing.
  7. Environmental Licenses – Environment Protection Act, 1986
    • Includes Consent to Establish and Consent to Operate from State Pollution Control Boards.
  8. Telecom License – Indian Telegraph Act, 1885 & Unified License Framework
    • Required for ISPs, telecom operators, etc.
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FRANCHISING LAWS

India does not have a specific franchising law, but several laws govern franchise agreements:

  1. Indian Contract Act, 1872
    • Governs enforceability of franchise agreements.
  2. Competition Act, 2002
    • Prevents abuse of dominance and anti-competitive practices in franchising.
  3. Trademarks Act, 1999
    • Brand licensing and IP protection in franchise models.
    • Registering and licensing of trademarks is key in franchising.
  4. Consumer Protection Act, 2019
    • Franchisors can be held liable for unfair trade practices or service deficiency.
  5. Foreign Exchange Management Act (FEMA), 1999
    • Governs cross-border franchising and royalty payments to foreign entities.
  6. Income Tax Act, 1961
    • Royalty payments are subject to withholding tax and transfer pricing rules.

✅ Note: Most franchise agreements are private contracts — due diligence, disclosure, and IP clarity are essential.

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TRADING LAWS
  1. Legal Metrology Act, 2009
    • Governs labelling, weights & measures in packaged goods and retail.
  2. Goods and Services Tax (GST) Act, 2017
      GST registration is mandatory for traders. Governs tax on sale/supply of goods and services.
  3. Foreign Trade (Development and Regulation) Act, 1992
      Regulates import/export. Requires Importer Exporter Code (IEC) for cross-border trading.
  4. SEZ Act, 2005 & Customs Act, 1962
    • For businesses operating in Special Economic Zones or involved in import/export.
  5. Essential Commodities Act, 1955
    • Regulates production, supply, and trade of essential commodities.
  6. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
    • Regulates advertising in trade of health products.
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KEY TAKEAWAYS
  • Licensing: Sector-specific, compliance-heavy (FSSAI, Factory, Pollution, etc.)
  • Franchising: Contract-based, governed by IP, contract & tax laws.
  • Trading: Covers everything from retail rules to global commerce (GST, FEMA, Customs).

Licensing, Franchising, and Trading are powerful tools for expanding business operations and entering new markets, but they come with unique legal challenges. Whether you're seeking to protect intellectual property through licensing, expand your brand with franchising, or navigate the complexities of international trade, it's crucial to have experienced legal guidance. Covenant Chambers offer expert advice and tailored solutions to help you structure through agreements, ensure compliance, and mitigate risks. Let us help you to unlock new opportunities while safeguarding your interests, so you can focus on what matters most—growing your business. Contact us today to learn how we can assist with your licensing, franchising, and trading needs.

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