Every owner of a successful small business is, at one point or another, confronted with the decision to invest more capital and grow, or fall back on their success and stay small. The inherent risk and investment required to grow a small business often prompts many owners to opt for the latter. Some small businesses never even make it off the ground due to a lack of funding even though the idea itself is great and could make a lot of money. Licensing and franchising however, are two ways through which owners can rapidly grow their businesses while delegating much of the costs and risks to a third party. Licensing Much like the state government granting individuals a license to give them permission to drive, businesses sometimes grant other organizations licenses to give them permission to use their intellectual property. A license is a contract through which one party grants another permission to use its patents, trademarks, copyrights, designs or trade secrets. The organization receiving the license, or licensee, compensates the licensor by paying a flat fee, royalties or a combination of the two. The agreement does not transfer ownership of the intellectual property. By licensing to third parties, small business owners can expand their businesses reach and grow sales without having to invest in new locations or distribution networks, and risking failure. Set-up A licensing agreement can be drafted and completed in as little as a week. Before offering a franchise however, a business must standardize its internal systems, operations, marketing and distribution. A business must also complete extensive legal documentation and draft franchising agreements before becoming a franchisor. Franchisees are also subjected to a lengthy and thorough selection process. Franchising usually takes longer and costs more to set up than licensing. Contact us for information on how you can license your product and launch your business! 725-666-3332
Posted on: Fri, 28 Nov 2014 04:26:59 +0000
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