What are the key differences between franchising and licensing internationally?

What are the key differences between franchising and licensing internationally?

Franchising involves a business model where the franchisor grants the franchisee the right to operate under its brand and system, while licensing allows a licensee to use intellectual property without the same level of control.

Can you give me examples of each?

Sure! McDonald's is a classic example of franchising, where franchisees operate restaurants under the McDonald's brand. On the other hand, a licensing example is Disney licensing its characters for merchandise.

What are the advantages of franchising over licensing?

Franchising often provides more support and training from the franchisor, ensuring brand consistency. It can also lead to higher revenue for the franchisor compared to licensing.

Are there any disadvantages to franchising?

Yes, franchising can require significant initial investment and ongoing fees. Additionally, franchisees have less control over their business compared to licensees.