Trademark License Agreement Vs Franchise
Franchises and licenses are the two commercial agreements, in which certain aspects of the brand are shared for a fee. However, a franchise agreement covers the entire brand and the operation of a business, while a licensing agreement only applies to trademarks. Franchises generally work best for service-based businesses, while licensing is more favorable for product-based businesses. A licensee has more control over how he manages his activities than a franchisee whose activity is dictated by the franchisee (franchisor). However, a franchisee also receives important guidance and training from the franchisee. The main feature of franchising licensing is restrictions. A license only grants access to the use of certain protected trademarks, that`s all. While this limits the deal, it could be all your business needs. It is also important to enter into a licensing agreement to ensure that you have taken these steps to protect your intellectual property. One of the advantages of becoming a franchisee is all the advantages of an independent contractor without the risk of starting a new business.
Franchises have the bonus of already being a proven business model with a pre-established customer base. Buying a franchise is often much less risky than starting a business from the bottom up, and while significant costs may be incurred, they can represent a smaller investment than if you were rebuilding your own business from the bottom up. In contrast, licensing is a limited and legal business relationship that gives a given party the right to use certain trademarks of a trademark. The business relationship is between the licensor (the one who owns the trademarks) and the licensee (the one to whom the rights of use are granted). If you buy a franchise, you get all the benefits of remaining independent, but you reduce the risk by being part of a proven business that usually has a ready and waiting customer base. You can also get a monopoly in a given area and your initial investment may be less than starting your own business. Often, a licensing agreement is concluded between a brand and anyone who has an existing business who simply wants to expand their product range; Comma; So this lack of support for people with established business may not be a big thing. A license agreement allows the use of trademarks, that`s all. In contrast, franchise agreements allow the use of trademarks, additional intellectual property, products, services, user manuals and much more. For example, Starbucks concedes 41 percent of its business (the rest is owned by companies). These licensed stores are the ones you see in airports or bookstores. While they are similar to the company`s companies, since they sell all Starbucks branded food and beverages and they look alike, the licensees of these companies retain creative and operational control of their activities.
Unlike a franchise agreement, Starbucks licensees are not required to follow the brand`s step-by-step business plan. However, you can choose to take up the brand`s proposals. Most of the time, companies that grant or purchase licenses deal with products. Licenses are ideal for adding a known brand or image to a product, for example. B clothing or other consumer goods. Did you know that if you buy a pair of Calvin Klein underwear, it`s not really made by Calvin Klein? The only clothes that the Calvin Klein company makes itself are some of its women`s lines. Any other Calvin Klein brand garment you buy, including perfume and jeans, as well as its famous underwear, is the result of a licensing agreement…