Franchise vs. Licensing: Which is Better?

What are the main differences between franchising and licensing?

Franchising involves a business model where a franchisee pays to use the franchisor's brand and business system. Licensing, on the other hand, allows a licensee to use a brand's intellectual property without the same level of control or support.

Which option is more profitable for a new entrepreneur?

It depends on various factors. Franchising can offer a proven business model and support, which may lead to quicker profitability. Licensing might have lower startup costs but can be riskier without established support.

What are the risks associated with each option?

Franchising risks include high initial fees and ongoing royalties, while licensing risks involve less control over brand use and potential quality issues.

Can you give examples of successful franchises and licenses?

Sure! Successful franchises include McDonald's and Subway, while popular licenses include Disney characters and Marvel superheroes.