The owner of a Hummus restaurant orally agreed with a franchisee who wanted to open a restaurant in the same name that the franchisee would, against payment of a fee, be able to use the knowhow as to preparation of the hummus and would be able to open a restaurant under the same name. The restaurant owner later contended that the franchisee was to pay an additional sum for the right to use the name and demanded the termination of the franchise and the compensation for the use of the name, inter alia because no registration was made with the trademark registrar.
The Court rejected the claim and held that a franchise agreement by nature includes, inter alia, the right to use trademarks, the transfer of knowhow and the provision of commercial and technical assistance - all during the term of the agreement. A franchise cannot be held without the possibility of using the trade name of the franchisor. In addition, the condition for registration of a license to use a trademark applies only to use for the goods in respect of which the trademark is registered, and not when it is permitted to only use the trademark as a graphic mark.