Write the difference between licensing and franchising.

Business model deals with products and goods.

Ownership is with licensee.

Governed by contracts law between parties

Without investing huge capital licensor will get vertical integration in market.

Licensor don’t have control over intellectual property rights.

Registration is not mandatory.

No training and support is provided.

One-time property/rights transfer.

Negotiable fee structure.

Royalties are commonly used term.

Covers single product/products.

Generally, established business will go licensing.

Business models deals with providing services.

Ownership is with franchisee.

Governed by companies’ laws and other federal laws (international business)

Franchisor get access to diversified market geographically.

High initial investment is required.

Registration is mandatory.

Training and support is provided.

Ongoing assistance is needed.

Management fee is commonly used term.

Covers total business

Generally, start-ups will go for franchise.