Licensing Vs. Franchising

There are two type of business you can choose either franchising or licensing but both of it mostly are similar in term of royalty and fees.  Choosing between franchising and licensing depends on the type of business, available start-up capital and the amount of creative control desired by a business owner. Also, how close a relationship an owner wants with a parent company should be considered.

Here are the nature both of it:

Licensing

o    Licensing grants a company or individual the right to use intellectual property such as trademarks, technology or patents within certain parameters. For example, a patent owner might grant a license to a company to use its research to manufacture a product.

Franchising

o    Franchising involves forming a business by entering into a contractual arrangement with an already established firm and operating under the established firm's trade name in exchange for a fee or royalties. Franchises exist in many industries, such as restaurants, salons, gyms and other service-based businesses.

Considerations

o    To determine which business type is the best alternative, certain things should be considered. For example, if a close working relationship with the parent company is desired, a franchising would be preferable, but the ability to infuse personal touches or creativity into the business is limited. If creativity and customization, or a more hands-off parent company relationship is desired, licensing would be a better alternative.

Therefore the decision is on your hand and make it properly dont make a mistake, because if you choose the wrong choice it mean you make a wrong history in business life. Think...think..and rethink..with the knowledge and experience you have. Judge it after you make a survey and investigate then you make you choice.