While the elements described in the code and described in the checklists provide useful guidance, it is not always clear what each of these legal principles means. Is buying a franchise for you? Here are some questions you need to ask yourself to make a smart decision. Learn more Another fundamental difference between franchising and licensing is the control a franchisor has over the franchisee. When you franchise your brand or business, you keep a huge amount of power. They provide the business model and can define the territory in which a franchisee can operate. When you license a company, you sell the rights to use your company`s products and brands in exchange for a version of the royalties, which are usually an agreed percentage of the licensee`s sale. The licensee reserves the right to own the affected products or intellectual property rights. A licensing agreement allows others to use your brand or logo on their products. With a franchise, you allow others to open a store that is imitating yours. The Australian Competition and Consumer Commission (ACCC) has a rigid definition of what constitutes a franchise agreement, which means that, regardless of how you and your partners define the relationship, your business can be classified as a franchise and you may be subject to the rules of the Franchise Code of Conduct. Here at FranNet – comma; we firmly believe that franchising is the way forward. The amount of help you get from a deductible is priceless. FranNet can help you find the perfect franchising opportunity.
If you think you`re ready to take this first step towards Business Ownership-comma; Sign up today for a free FranNet search and franchise advice. If you want to grow but not assume the financial or operational responsibility of another company, a licensing agreement may be the best strategy. When you buy a franchise, you get all the benefits of independent activity, but you reduce the risk by being part of a proven company that usually has a ready and on-waiting customer base. You can also get a monopoly within a certain territory, and your initial investment may be less than setting up a business on its own account. Although both parties have similar advantages, licensing can be characterized as a subset of franchising; In other words, a typical franchising agreement would involve many licensing agreements to transfer the use of intellectual property rights.