she specializes in immigration, labor, intellectual property and civil
rights law for local, foreign and multinational companies.
Salduba Building, 3rd Floor
East 53rd Street, Urbanizacion Marbella
Panama City, Panama
507.269.2641 Phone
507.263.8079 Fax
quijano@quijano.com
www.quijano.com
means of Law 35 of 1996. A franchise
is an arrangement in which the owner
or user license of a trademark agrees
to transmit technical know-how or
technical assistance in a manner that
allows the person to whom the franchise
is granted to produce or sell goods or
provide services in the same manner and
with the operational, commercial and
administrative methods established by
the owner of the trademark in order to
maintain the quality, the prestige and the
image, which the trademark represents.
Panamanian legislation does not deal
with the basic requirements of a user
license contract by which a franchise is
established. It only indicates that it is to
be considered a franchise when technical
know-how is transmitted or when
technical assistance is provided in order
to develop the business in the Republic
of Panama while complying with certain
quality standards.
This means that under Panamanian
legislation, both the franchiser and the
franchisee shall only have the obligations
and the rights contained in the user
license contract, which is submitted to
the Directorate General of Industrial
and Industries, known as "DIGERPI"
in Spanish, for its registration. Under
Article 122, the following requirements
have to be fulfilled in order to obtain the
registration of a user license:
number of identity certificate or
personal identity of the parties.
indication of the number and date
of registration.
to use the trademark.
with the DIGERPI, the trademark must
be already registered, otherwise the
application will not be processed until
the Certificate of Registration of the
owner of the trademark has been issued.
The franchise contract in Panama
is governed by the principle of the
autonomy of the will of the parties as
provided by the Civil Code, since the
franchiser and the franchisee may freely
well as the jurisdiction to which they will
submit in the event of a conflict arising
from the franchise contract concerning a
specific activity.
In order to establish a franchise
in Panama, it only has to comply with
the existing legislation concerning
industrial property and the other
conditions required for a corporation to
operate, such as the Notice of Operation
(commercial license), and in the case
of franchises of food, it must have the
respective health permits.
The first franchise to be established
in Panama was in 1957 concerning the
vehicles of frozen products of Tastee
Freeze, and two years later, the Dairy
Queen franchise opened, which still
remains in the market. The franchises
that have more extensively developed in
Panama are McDonalds, Kentucky Fried
Chicken, Pizza Hut and Burger King.
There are also national franchises
such as Pio Pio and Don Lee. The
Authority of the Micro, Small and
Medium Enterprises, known as
"AMPYME" in Spanish, is now
developing models of franchises for such
smaller enterprises in the Republic
of Panama, and its main goal is the
development of the methods of a system
of franchises in four stages: