diff --git a/backend/src/routes/adminSettings.js b/backend/src/routes/adminSettings.js
index e655e6e3..b92c5ec7 100644
--- a/backend/src/routes/adminSettings.js
+++ b/backend/src/routes/adminSettings.js
@@ -392,11 +392,21 @@ router.post('/branding/watermark-logo', adminAuth, requirePermission('settings.e
       .first();
 
     if (oldWatermarkLogoSetting && oldWatermarkLogoSetting.setting_value) {
-      const oldPath = JSON.parse(oldWatermarkLogoSetting.setting_value);
+      let oldPath;
       try {
-        await fs.unlink(oldPath);
-      } catch (error) {
-        console.error('Failed to delete old watermark logo:', error);
+        // Try to parse as JSON first (for JSON-stringified paths)
+        oldPath = JSON.parse(oldWatermarkLogoSetting.setting_value);
+      } catch (e) {
+        // If it's not valid JSON, use the raw value
+        oldPath = oldWatermarkLogoSetting.setting_value;
+      }
+
+      if (oldPath && typeof oldPath === 'string') {
+        try {
+          await fs.unlink(oldPath);
+        } catch (error) {
+          console.error('Failed to delete old watermark logo:', error);
+        }
       }
     }
 
@@ -421,13 +431,13 @@ router.post('/branding/watermark-logo', adminAuth, requirePermission('settings.e
     await db('app_settings')
       .insert({
         setting_key: 'branding_watermark_logo_url',
-        setting_value: publicPath,
+        setting_value: JSON.stringify(publicPath),
         setting_type: 'branding',
         updated_at: new Date()
       })
       .onConflict('setting_key')
       .merge({
-        setting_value: publicPath,
+        setting_value: JSON.stringify(publicPath),
         updated_at: new Date()
       });
 
diff --git a/backend/src/services/watermarkService.js b/backend/src/services/watermarkService.js
index 8c5de36c..2ef44a6c 100644
--- a/backend/src/services/watermarkService.js
+++ b/backend/src/services/watermarkService.js
@@ -177,14 +177,25 @@ class WatermarkService {
         settings.position
       );
 
-      // Apply watermark
-      const watermarkedBuffer = await image
-        .composite([{
-          input: watermarkBuffer,
-          top: position.top,
-          left: position.left
-        }])
-        .toBuffer();
+      // Apply watermark with high quality output to preserve original image quality
+      let watermarkedImage = image.composite([{
+        input: watermarkBuffer,
+        top: position.top,
+        left: position.left
+      }]);
+
+      // Preserve original format with high quality settings
+      const format = metadata.format || 'jpeg';
+      let watermarkedBuffer;
+
+      if (format === 'png') {
+        watermarkedBuffer = await watermarkedImage.png({ quality: 100, compressionLevel: 6 }).toBuffer();
+      } else if (format === 'webp') {
+        watermarkedBuffer = await watermarkedImage.webp({ quality: 95, lossless: false }).toBuffer();
+      } else {
+        // Default to JPEG with maximum quality (100) to prevent recompression
+        watermarkedBuffer = await watermarkedImage.jpeg({ quality: 100, mozjpeg: true }).toBuffer();
+      }
 
       // Cache the result
       this.cache.set(cacheKey, {