Franchising In Mexico

According to article 142 of the Mexican Industrial Property Law (IPL), a franchise exists when along with the license of a trademark there is the transfer of technology or the obligation of providing technical assistance for the manufacture, sales, or for the rendering of services.

In Mexico, the licensing and franchising figures are so closely related, that both figures are regulated by the same articles located in chapter VI of the Fourth Title of the IPL. However, taxes and fees for the licensing or franchising of trademarks are contemplated in our Income Tax Law (ITL).

When registering franchise and license agreements, registrants may delete the provisions dealing with royalties and technical information, however, in order to avoid confusion which may arise from the filing of briefings or short forms, it is recommended to file with Trademark Office (TMO) the whole agreement as executed, deleting such information therefrom.