TRADEMARK FRANCHISING IN NIGERIA
There are various reasons why foreign brand owners may be interested in the Nigerian market. First is the significant population of Nigeria, which stands at over 200 million people. Second is the fact that Nigeria is a large nation of consumers, and third is the fact that fast-moving consumer goods are highly successful there. At present, there are over 100 franchises in Nigeria ranging from food to construction, health and other industries.
One law that regulates franchising is the National Office for Technology Acquisition and Promotion (NOTAP) Act. The NOTAP Act is the primary legislation on the transfer of technology in Nigeria. It establishes the National Office as the body responsible for overseeing its implementation and is primarily concerned with examining the quality of imported technology and the registration of contracts that deal with the transfer and acquisition of foreign technology. However, the NOTAP Act also carries certain provisions that affect foreign direct investment and foreign trade participation in Nigeria. These provisions affect trademark franchising and licensing, as well as the repatriation of profits.
Salient provisions affecting trademark franchising
Under Section 4(d) of the NOTAP Act, one of the National Office’s functions is the registration of all contracts or agreements for the transfer of foreign technology to Nigerian parties. It states that “every such contract or agreement shall be so registrable if its purpose or intent is, in the opinion of the National Office, wholly or partly for
or in connection with… the use of trademarks”, as well as patents, technology plants and technical expertise. The act further stipulates that foreign franchise agreements, which include the right to use the franchisor’s trademarks, must be registered under the act.
According to the act, a contract for the use of another’s trademarks constitutes a contract for the transfer of technology. As franchise agreements relate to the use of trademarks, they are therefore contracts for the transfer of technology. Hence, trademark franchising falls within the scope of registration with the National Office.