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Fatwa CenterFranchise system of business
Question
What is Islam's point of view of the "Franchise System" as a type of business ownership?
Answer
Praise be to Allah, the Lord of the World; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
The trademark is a particular symbol that limits the ownership of a given good or service to a specified party as the only one who has the right to provide or produce such a good or a service. The owner of the trademark might give another party the right to make use of his mark in return for financial compensation as this mark is a property to its owner and it is unlawful to anyone to abuse, make it or use of it without the consent of the owner.
This is the Fatwa of The Islamic Fiqh Council in its decision Number 43/(5/5) taken during its fifth conference in Kuwait held from 1 to 6 Jumada al-Awal 1409. This Fatwa is as follows:
'The trade name, the trade address, the trademark, the copyright, and patent are all particular properties of their owners. In fact all these rights have a conventional financial value as people might profit from them. Sharia respects these rights and forbids their abuse.
On the other hand, the owner of any of the above can allow another party to use his mark in return for financial compensation provided there is no risk, defraud or deception in that operation'.
Allah knows best.
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