“Licensing” is a generic term that encompasses a broad range of business activity. In simplest terms, a “license” is the right to use someone else’s property (usually intellectual property, such as a trademark or patent). Although some think of a “license” as an alternative to a “franchise,” the terms are not mutually exclusive. In fact, one is a subset of the other — every franchise is a license, but not every license is a franchise.
We’ve strategized with clients on a variety of licensing arrangements to meet business objectives – and often the objective is to avoid creating a franchise. Sometimes brand owners want to expand their markets without taking on the legal burdens and expectations of a franchise program. And sometimes franchise companies want to create separate, non-franchised distribution channels for their branded products. Our Licensing services often go hand-in-hand with our Trademark services.
Some of the solutions we’ve crafted are:
- Product supply arrangements with a branding component (such as “we proudly serve”-type programs)
- Affiliation programs that create brand identity without full franchise-type integration
- Dealer programs with carefully limited brand licensing and supplier controls
- Agency arrangements in which commissioned agents operate under a common business name
- Merchandising programs in which a brand owner licenses its trademark for use on unrelated products (such as tee shirts and coffee mugs)
- Arrangements that avoid franchise law compliance burdens by taking advantage of “fractional franchise” and other exemptions
- Know-how licensing without a branding component