If you`re looking for ways to expand your business, it`s easy to confuse licensing and franchise models. Terms are sometimes used interchangeably, but there are important differences. What are the differences between the two strategies? What are the pros and cons of deductibles? As a franchisor or licensee, what rules should you follow? And if you`ve already established a relationship with a business partner, how do you know if it`s a license or a franchise agreement? The code defines “franchise agreements” and defines specific elements that all must be present in order for a particular agreement to be considered a franchise. The licensing relates to an agreement between the licensee and the licensee, in which that party acquired the right to use products and property if the property remains with the licensee, while Franchising refers to an agreement between franchisee and franchisee in which the franchisee, on behalf of the franchisee, owns a business on behalf of the franchisee, on behalf of a royalty whose processes are tightly controlled by the franchisor, whereas licensing generally applies to products and goods while the franchising model is used in the service sector. If you have franchise, you get the advantage of brand recognition and `comma`; but also a lot of support in running the business within a defined system. If you already have your own business and decide to join a Comma franchise, it means giving up control of how you currently run your business. For example, you can own a fashion brand and choose to add a series of sunglasses. After examining the cost of making sunglasses yourself, you realize that it is easier or cheaper to relocate and enter into an agreement with a manufacturer. The manufacturer then designs and produces sunglasses with your brand. In this example, a licensing agreement would allow the manufacturer to use your brand. In a licensing model, you pay for the use of intellectual property, but you can run your business according to your wishes.
The brand from which you conceded can describe in detail how your property can be used, but they do not offer a business model or support as you would receive from a franchisor. The best model for you depends on your situation, the control you want to maintain over the business and the support you need. A licensing agreement is often less expensive and does not take as long to be entered into as a franchise agreement, but it is also available without the support and other benefits offered by a franchisor. Another aspect of legal protection is another consideration. In some Canadian provinces, there are special franchise laws that protect deductibles, but a licensing agreement may not be covered by those laws. If you read this, chances are you`re an entrepreneur who wants to make more money, have multiple streams of income, retire early or leave an inheritance to your family. Franchise and licensing can help. The comparison between franchising and licensing often raises the question of whether or not licensing is an alternative to franchising? The answer to this question is that licensing is not an alternative to franchising. This is because franchise laws broadly define a franchise as a relationship that involves (a) the license of a trademark, (b) a degree of control over business activity (i.e.
standards and specifications) and (c) payment of a prior fee. So if your goal is to expand the unit of your business, i.e. with a relationship where you have some control and say what your franchise partner/licensee offers and sells, then the relationship is most likely a franchise. One of the best known examples of a franchise is McDonald`s. Since the beginning, the McDonald`s franchise now has more than 36,000 restaurants worldwide. How do you rate, for example, whether you “basically” control the company`s marketing system or plan? And if we consider that the