Money
Issue No. 51 - February/March 2010
Licence or franchise?
We are often asked “What is the difference between licensing and franchising?”
On a very general level, licensing and franchising both deal with the selling of certain intellectual properties, whether software, trademark, or a business process, to third parties. However, franchising, under the watchful eye of the ACCC, has a greater deal of control by the owner-franchisor than a license.
For a business seeking to grow its brand across Australia and potentially overseas, franchising offers a methodology that allows you to reach a large size in a relatively short period of time due to:
• Efficient leveraging of your IP and systems
• Fast growth with less risk and less of your own funds and sales representatives
• Learning from talented group of franchisees
• Accessing difficult local markets and increase buying power
• Sharing your success with many others
• Increased marketing spend and power
• Increased brand strength and viability
• Substantial financial rewards after critical mass for stakeholders
For example, a typical franchisor will grant you the
right to use the business process and the IP associated with that process (Here in South Australia some great franchised brands include Cartridge World, Wokinabox, Marcellina,The Fairies, Wendys to name a few) in return for purchasing from the franchisor (or designated third parties) the goods or services required to operate the franch...
