Franchising offers the system of proven strategies and action. Licensing is brand associated with their emotional experience. Licensing allow you to design and develop products in line with the brand’s mission.
Take an example, say you have a brand call “Caterpillar”. Your potential partner for licensing is to extend your brand for fashion and baby products. What image you would like to create for your brand. Obviously you do not wish to dilute your brand.
You set the guideline that for licensing of your brand in producing baby products, limited to clothing, toys, accessories but not diapers. Why not diapers, you may ask. You want to relate your brand to things that bring sweet memories. You would like to relate well to children when they grow older. Photos taken of these children remind you of your brand.Your licensing partner can then offer the franchising agreement with your endorsement. He can become your master franchisee for that region.
Licensing offer more for your creativity while franchising offer a proven success systems with localization. Franchising needs to take a look at the local culture and language. Flexibility and adaptability is the cornerstone for success in franchising.
You would agree that no everyone can have a licensing agreement from you. You would have set the selection criteria and also you engage professional to market and assess the potential business partnering party.
Prior to engaging the franchising consultants or specialists, you would like to have a checklist of what you want. The franchising consultants may ask about reasonableness. You would need to establish your brand’s worth. This would help you to establish what fee to levy, what royalty fee and monthly report from franchisee.
Licensing your trademark would mean you need to register your trademark in various countries. Are you going to register all countries or countries that you have identified. The buying power of these countries would be of your prime consideration whether franchising or licensing. You need to register your trademark. The franchisee would verify your claim and at times, someone may have use that name for their company registration.
Which ever you prefer – license your brand or franchise your methods for business, you got to know the crux of franchising and licensing.
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