Relating to Real Estate
Landlords: Try Owning Your Tenants’ Trademarks
Landlords and property owners should consider owning the names of their tenants’ establishments. Landlords should also consider buying the name from a tenant that is going out of business or making a rent concession in order to obtain the name.
By becoming the trademark owner of the restaurant or store on the landlord’s property, the landlord has the flexibility of substituting a new operator if the business concept is sound, but the current tenant cannot maintain the business. This gives the landlord (and new tenant) a head start on acquiring the goodwill that has built up in the space, and it helps the landlord maintain patrons loyal to the facility.
A landlord/developer should be sure to have a written license with the tenant for the trademark, either as part of or in addition to the lease. As a trademark licensor, the landlord must have some control over the quality of the services offered in connection with the brand. But this control should not be so strong in dictating how the tenant runs its business, or else it may create an unintended unregistered franchise.
For questions, contact Ned Himmelrich (410) 576-4171.