Licensing and franchising pdf file

Franchising is typically considered a safer type of business for someone to. Licensing is also not subject to state franchise disclosure and registration laws or business opportunity disclosure and registration laws. Licensing is an arrangement in which a company licensor sells the right to use intellectual property, or produce a companys product to the licensee, for a negotiated fee i. International franchising and licensing request pdf researchgate. Difference between licensing and franchising praxis legal.

If you continue browsing the site, you agree to the use of cookies on this website. Exporting, licensing, franchising bus 343 international marketing learning objectives after. So, licensing can be a good way to start if you are interested in franchising your business. These may include national marketing, accounting, pointofsales information, site selection, and site acquisition. This is because licensing is not subject to the ftc franchise rule.

In contrast, a licensing arrangement allows a licensee considerable freedom in the operation of his or her business. This file contains additional information, probably added from the digital camera or scanner used to create or digitize it. But which model is better franchising vs licensing. In fact, licensing when used as an alternative to franchisingis a trap that may damage your. Licensing top national franchise lawyers based in ny. There are many opportunities for people who want to explore careers and business. They want someone who will focus on being an owner business and management skills people and communication skills proven process franchisor trains on how to use their system.

Six days a week, in neighborhoods all across the country, more than 2,000 chickfil a restaurants are serving handbreaded chicken sandwiches, hot waffle fries and genuine hospitality. View homework help case stra cavusgil franchise of subway. Licensing and franchising free download as powerpoint presentation. If the file has been modified from its original state, some details may not fully reflect the modified file.

While they may mistakenly be used interchangeably they are two distinct concepts and this article will discuss their differences to assist you in deciding between franchising vs. In other words, this type of franchising provides the franchisee with a complete business format including license for a trade name, the product or service to be marketed, the physical plant, methods of operation, a marketing strategy plan, a quality control. Jul 26, 2016 accordingly a franchise agreement is typically a lot more prescriptive than a license agreement. Structuring licenses to avoid the inadvertent franchise by rochelle spandorf or any type of monthly fee based on gross receipts for the distribution or licensing rights. Under a franchise, the owner franchisor retains control of the brand and licenses that is, grants permissions to the franchisee to use its. In fact, franchising is a method of distribution, not a particular industry. Business format franchising is when the franchisor and franchisee have an ongoing relationship, and the franchisor provides a full range of services, including site selection, training, product supply, marketing plans, and even assistance in obtaining financing. The broad scope of the franchise laws may apply to a distributorship or license relationship resulting in an unwitting breach by a business owner of federal or state franchise and business opportunity laws. In franchising, the franchisee gets the right to display the same brand logo, trademark, name and image. However, some people still think that franchising and licensing are almost the same and have no specific difference. Here we discuss the top difference between licensing and franchising along with. Start studying exporting intermediaries, licensing and franchising. Both can be a route to successful expansion, as an alternative to organic growth and with less risk.

This written contract is called a license agreement. Yet, these situations arise with considerable frequency. Distributorshipdealership, licensing arrangement or franchise. If you are a business owner, you may want to license the use of your brand or products to another business in order to gain more exposure for your company and earn revenue on the side. Franchising is a growing and important part of our economy franchising is a national and international strategy for grow ing a business. Franchising has been a strategy used by many firms to expand domestically and internationally. The franchi sor licenses to the franchisee, for a defined period, the right to use the franchisors business model and intellectual property. Franchisors want a person that can use their system. But this is not the case, as franchising is totally different to licensing. Business format franchising accounts for most of the explosive growth in franchising that has occurred in the past five decades.

Gappa president, management 2000 for the past twentyfive years the key concepts of franchising have been under going evolution and transformation. Bringing a meaningful brand to people in unique environments where life happens. Difference between licensing and franchising with comparison. The advantages and disadvantages of franchising by david e. A franchise is a more extensive legal relationship that includes a license. A license arrangement is primarily composed of 2 elements. For a company looking to expand, franchising and licensing are often appealing business models. If the file has been modified from its original state, some details such as the timestamp may not fully reflect those of the original file. The advantages of franchising described in the last chapter come at a cost.

Licensing vs franchising top 5 best differences with infographics. Licensing works best when a company does not have any desire to exert any type. Whether you are licensing or franchising, the important thing is to protect your ip. Licensing franchise free download as powerpoint presentation. The broad scope of the franchise laws may apply to a. Franchising and the impact, page 4 had corporate stores that they wished to sell, they may offer them to an existing franchisee as a joint venture. When franchisor sells the complete business format and system of hisher product to the franchisee, it is called pure franchising.

View notes podcast 1 exporting, licensing, franchising. On the most basic level, the difference between a franchise and a license is the amount of support you can expect to receive. Exporting intermediaries, licensing and franchising. Structuring licenses to avoid the inadvertent franchise. This article will explore different growth strategies with a particular emphasis on franchising, which is the most highly regulated of the growth strategies analyzed. This is because licensing is not subject to the ftc franchise rule or and other federal law or rule requiring presale disclosure. Each growth strategy has its own advantages and disadvantages, and each has its own legal ramifications. Whats the difference between franchising and licensing. Certainly no licensor expected to end up defending franchise allegations.

Holmes northern california office s outhern california office 555 chorro street, suite. Licensing and franchising can be done both as a business owner and as someone looking to enter a specific market. Examples of licensing pharmaceutical firms engage in cross licensing practices in which they exchange scientific knowledge about producing products and distribution rights. This file contains additional information such as exif metadata which may have been added by the digital camera, scanner, or software program used to create or digitize it. February 9, 2010 min read opinions expressed by entrepreneur contributors are. Licensing is not based on managed computers, the number of pdq consoles, where software is installed, if you share credentials, or even if you only access through the command line cli. Chickfil a licensing opportunities are available to licensed food service providers and selfoperated food service providers in university and college campuses, airports, healthcare facilities, or business and industry venues. The major difference between franchising and licensing. Service firms in retailing, fast food, car rentals, television programming, and animation rely on licensing and franchising agreements.

Management 2000 has had the good fortune of being in the middle of those developments. The obvious advantages of licensing over franchising include reduced legal costs, reduced accounting and auditing costs, no registration and approval of the license program with any state, and quicker entry into the marketplace. Holmes northern california office s outhern california office 555 chorro street, suite d2 6621 pacific coast hwy. From franchising to licensing, journal of marketing channels, 19. However, while franchising is a regulated industry and there are startup costs and expenses associated with franchising your business, it is critical that you understand that licensing is not an alternative to franchising. Family business is the most prevalent form of business thru out latin america. In a franchising model, the franchisee uses another firms successful business model and brand name to operate what is effectively an independent branch of the company. Two powerful ways to grow your business in any economy restaurant franchising. To understand licensing, let us take the example of walt disney.

In a franchising model, the franchisee uses another firms successful business model and brand name to operate what is effectively an independent branch of the. The difference between licensing and franchising can be drawn clearly on the following grounds. February 9, 2010 min read opinions expressed by entrepreneur contributors are their own. Franchising is a form of licensing whereby the franchiser provides a standard package of components or ingredients together with management and marketing expertise, and the franchisee provides capital, market knowledge, and personal involvement. Franchising vs licensing difference and comparison diffen. In a franchising model, the franchisee uses another firms successful business model and brand name to operate what is effectively an independent branch of. Licensing and franchising, what is the difference and does it. Concepts, regulations and practices, third edition fundamentals of franchising for dummies for dummies computertech windows xp timesaving techniques for. If your goal is to expand and grow your brand through additional outlets or service areas, then franchising is the correct legal model and licensing is not an alternative. In exchange for these rights and services, the franchisor receives an upfront fee for the rights to a geographic area, as well as royalties based on sales. The others are company owned units or a combination of company owned and franchised units.

Consequently, a broad variety of unsuspecting business arrangements may qualify as franchises. The idea was to introduce young people to franchising, to the many facets of the franchising business, and to the many opportunities that franchising offers for both employment and professional careers and for business opportunities and business ownership. Introduction to franchising small business administration. What is the difference between licensing and franchising. When trying to expand or leverage your successful business to further growth two models that are commonly used are franchising and licensing. Learn vocabulary, terms, and more with flashcards, games, and other study tools. In franchising, the franchisor licenses its intellectual property to the franchisee. Franchising is one of three business strategies a company may use in capturing market share. The obvious advantages of licensing over franchising include substantial lower legal costs, reduced accounting costs, no auditing costs, no registration in the franchise registration states and approval of the license program with such state, and quicker entry into the marketplace. As con sumer protection statutes, franchise laws are given a sweeping scope by courts. Unclear about the differences between licensing and franchising. Dec 15, 2014 difference between licensing and franchising the hallmark of a franchise is the nature and extent of the control that a franchisor exerts over the operation of a franchisees business. Aug 12, 2017 key differences between licensing and franchising.