Licensing vs franchising business plan

Getting Started The Pros and Cons of Franchising in China US companies must jump hurdles to operate successful franchises in China, but the potential benefits are too great to ignore. The China Chain Store and Franchise Association CCFA —a quasi-government nonprofit membership association for Chinese and foreign retailers, franchisers, and well-known foreign brands—also formed.

Licensing vs franchising business plan

licensing vs franchising business plan

By Melissa Ontong In a typical licensing agreement, the licensor grants the licensee the right to sell goods, apply a brand name or trademark, or use patented technology owned by the licensor, in exchange for payments to the licensor paid by the licensee for use of such right.

In a franchising agreement, the franchisor also offers know-how and access to a business system in addition to branding and products offered by the franchisor Our clients often approach us with licensing in mind and we offer the following comparison between franchising and licensing: Franchisor offers extensive training on operating of the business as a whole.

Ongoing support is also offered and usually takes the form of a monthly visit from a franchisor representative. Fees Ongoing license fee usually payable Initial and ongoing franchise fees payable: Upfront franchise fee Monthly management service fees National marketing fund contribution on monthly basis The Consumer Protection Act applies to franchising and, although it remains to be tested, may well apply to licensing arrangements as well, if licensing agreements meet the definition of a franchise agreement as per the CPA.

The Consumer Protection Act defines a franchise agreement as follows: What this may mean for licensors is that their agreements and business processes may need to be compliant with the Consumer Protection Act.

A Different Approach

Also, businesses who want to avoid compliance to the CPA by terming their agreement a license agreement could end up having to comply with the CPA anyway. Franchising Plus encourages business format franchising where applicable, as it provides most benefits to a franchisee and franchisor by ensuring the replication of a business system, rather than a brand or a product only.

If you want to discuss your expansion options in terms of licensing or franchising, contact us Latest Tweets.The Major Difference Between Franchising and Licensing.

“What is the difference between franchising and licensing?” when buying a business.

Massage Envy

Franchising is typically considered a “safer” type of business for someone to purchase when they are looking to be in business for themselves.

For a discussion of some of the legal and business implications of the franchise vs. license decision, read our illuminating franchise articles Franchising vs. Licensing A Business (Franchise vs.

License) and Franchise Business Opportunity Expansion Options.

licensing vs franchising business plan

A franchise is the agreement or license between two legally independent parties which gives: • a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor) • the franchisee the right to market a product or service using the operating methods of the franchisor • the franchisee the obligation.

Atlanta, GA – Tahir Sheikh has been involved in the professions of accounting, income tax, and business advisory, banking, commercial and residential real estate, franchising and non-franchising business sales for more than two decades. Tahir has experience of working with some of the leading institutions in Asia, Middle East and North America.

Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchiser licenses its know-how, procedures, intellectual property, use of its business model, brand; and rights to sell its branded products and services to a return the franchisee pays certain fees and agrees to comply with certain.

Franchising means selling the rights to use a business model and trademark, whereas licensing lets a party use a trademark, such as a logo, business model or product, with certain restrictions on.

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