Brand Tuned - Smart Thinking, Better Branding
Shireen Smith (from YouTube) - Part 1 Licensing And Franchising, What Is The Difference And Does It Matter?
Sep 07, 2020
There is widespread confusion about an aspect of franchising and licensing which is caused by the difference between the laws in the USA and the UK. So, I will be clearing up the confusion that I see in many articles online.
- Franchising is a way to scale a business once the business model is successful and proven
- A franchise agreement will usually give the franchisor the ability to control how the business is run
- The franchisor is expected to provide support to its franchisees in the form of marketing, access to trusted suppliers, systems, and other resources and skills
- Franchising a business involves finding franchisees with the necessary skills and experience to operate branches of the same business
- Licensing is essentially how you exploit intellectual property
- Franchising is a type of licensing arrangement
- The details of the terms and conditions in a licensing agreement will vary considerably depending on the business transaction you’re aiming to achieve
- Before you embark on licensing it’s essential to ensure you have the necessary intellectual property rights in place
- Another example of how licensing can be used involves giving access to your methodology for doing something
- Using the wrong terminology, such as giving an exclusive licence to someone can destroy the owner’s rights to exploit its intellectual property