Compare And Contrast Licensing Agreements And Franchising Agreements

Disney`s main competitor, Warner Bros., also derives significant revenue from the IP business it owns, with DC Comics offering massive licenses for toys and clothing. Even the magical world of Harry Potter is the result of a licensing agreement. As Warner Bros. does not own theme parks, it has decided to grant its amusement parking rights to Universal Studios to take advantage of the Harry Potter IP. Licensing refers to an agreement between the licensee and the licensee, under which that party acquired the right to use products and goods if the property remained in the hands of the licensee, while Franchising refers to an agreement between franchisees and franchisee, under which the latter , on behalf of the franchisee, is subject to a tax in which procedures are tightly controlled by the franchisor, the ownership of a business will be used, the franchising model is more used in the service industry. Buying a franchise or conceding a product for sale is not an easy decision. It`s a choice you want to make to research and think. For many potential entrepreneurs, franchising is an interesting opportunity because it offers you the opportunity to be your own boss without taking the considerable risk of starting a business from scratch. You benefit from an economic model and continuous support. One of the licensing professionals is the freedom for the licensee. As a general rule, a licensing agreement is entered into between two established companies. The licensee buys the right to use protected trademarks already recognized and appreciated by an integrated fan community.

This makes licensing a safe investment and a great way to boost your business. Franchises and licenses are both commercial agreements in which certain aspects of the brand are shared for a fee. However, a franchising agreement covers the entire brand and a company`s activity, whereas a licensing agreement applies only to registered trademarks. Franchises are generally the most appropriate for service-based businesses, while licenses are more favorable to product-based businesses. A licensee has more control over how it manages its business than that of a franchisee whose activity is dictated by the franchisor (franchisor).