What is the difference between licensing agreements and franchise agreements?

What is the difference between licensing agreements and franchise agreements?

Licensing agreements allow one party to use another's intellectual property, while franchise agreements involve a business model where the franchisee operates under the franchisor's brand.

Can you give me examples of each?

Sure! An example of a licensing agreement is a software company allowing another company to use its software. A franchise agreement example is McDonald's, where franchisees operate under the McDonald's brand and business model.

What are the legal implications of each?

Licensing agreements typically involve less regulatory oversight, while franchise agreements are subject to specific franchise laws and regulations, requiring disclosure documents.

Which one is better for a new entrepreneur?

It depends on your goals. Licensing can be less risky and requires less capital, while franchising offers a proven business model but may involve higher costs.