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Franchising Vs. Licensing

        By:- Vijay Kamboj
    Vijaykambojlearner.blogspot.com
             9466500020
Franchising Vs. Licensing

You might have come across the terms
  ‘franchising’ and ‘licensing’. As similar as these
  two may sound, there’s quite a lot of differences
  between the two.
While franchising is a recognized legal
  terminology, in the sense that it subjects the
  party offering these services to certain rules and
  regulations, licensing does not come with these
  issues, but it is necessary to be careful as
  licensing can also be considered a franchise
  from a legal standpoint.
Franchising Vs. Licensing
• In franchising, the franchisee and the franchisor are
  very closely linked and have better working
  relationships. The franchisee gets to retain the rights
  to the franchisor’s logo and trademark. This also
  goes a long way in providing a visible presentation
  of the relationship between the two. Franchisees are
  often an extension of the parent company, in that
  they represent the parent company’s brand and
  image. Therefore, they are usually provided some
  level of training and support. Also, they get to
  leverage some amount of territorial exclusivity in
  addition to control over the products and services
  offered.
Franchising Vs. Licensing
• The relationship between a licensee and the
  parent company is not as tight-knit as a Licensee
  franchisor relationship. That is because a licensee
  does not hold the rights to the trademark and logo
  of the parent company’s brand. Also, the
  franchisee is expected to create its own niche and
  identity in the market. Another key difference is in
  the fact that licensees do not get to have territorial
  rights from the parent company. Which means that
  licensing organization gets to sell similar licenses
  and products in the same geographical area.
  Licensees also do not receive the same extent of
  support and training as compared to a franchisee.
Franchising Vs. Licensing
• Even though from the looks of it, a licensing
  opportunity seems to be less advantageous as
  compared to a franchising business, licensing has its
  advantages as well. One advantage is that licensing
  costs much lesser in terms of the initial investment and
  ongoing charges. While a franchising business may
  require you to pay royalty every time a profit is made,
  a licensing opportunity does not demand such an
  expense. Also, once the licensee is able to
  successfully set up its business and spin off on its
  own, the relationship between licensee and the parent
  company is restricted to the frequent purchase of
  products

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Franchising vs. licensing

  • 1. Franchising Vs. Licensing By:- Vijay Kamboj Vijaykambojlearner.blogspot.com 9466500020
  • 2. Franchising Vs. Licensing You might have come across the terms ‘franchising’ and ‘licensing’. As similar as these two may sound, there’s quite a lot of differences between the two. While franchising is a recognized legal terminology, in the sense that it subjects the party offering these services to certain rules and regulations, licensing does not come with these issues, but it is necessary to be careful as licensing can also be considered a franchise from a legal standpoint.
  • 3. Franchising Vs. Licensing • In franchising, the franchisee and the franchisor are very closely linked and have better working relationships. The franchisee gets to retain the rights to the franchisor’s logo and trademark. This also goes a long way in providing a visible presentation of the relationship between the two. Franchisees are often an extension of the parent company, in that they represent the parent company’s brand and image. Therefore, they are usually provided some level of training and support. Also, they get to leverage some amount of territorial exclusivity in addition to control over the products and services offered.
  • 4. Franchising Vs. Licensing • The relationship between a licensee and the parent company is not as tight-knit as a Licensee franchisor relationship. That is because a licensee does not hold the rights to the trademark and logo of the parent company’s brand. Also, the franchisee is expected to create its own niche and identity in the market. Another key difference is in the fact that licensees do not get to have territorial rights from the parent company. Which means that licensing organization gets to sell similar licenses and products in the same geographical area. Licensees also do not receive the same extent of support and training as compared to a franchisee.
  • 5. Franchising Vs. Licensing • Even though from the looks of it, a licensing opportunity seems to be less advantageous as compared to a franchising business, licensing has its advantages as well. One advantage is that licensing costs much lesser in terms of the initial investment and ongoing charges. While a franchising business may require you to pay royalty every time a profit is made, a licensing opportunity does not demand such an expense. Also, once the licensee is able to successfully set up its business and spin off on its own, the relationship between licensee and the parent company is restricted to the frequent purchase of products