WHY LICENSE VS FRANCHISEMany potential business owners are confused between the concepts of a franchise and license.
Franchise Vs. License Agreements
Many potential business owners are confused between the concepts of a franchise and license (a.k.a. business opportunity). A key difference lies in the area of law by which each business type is governed. This legal difference forms the basis for what information needs to be included in each type of agreement.
The issue of control over day-to-day operations will also likely be covered in both the franchise and license agreement. With a franchise system, the franchisor retains control over general business operations, marketing, as well as how its services or products are delivered to the end user. A licensee is given much more freedom with regard to business operations, marketing and sales. However, most licensors do require that licensees adhere to quality assurance standards.