Franchising and licensing

Concept of Franchise and Licensing

1. A PRESENTATION ON FRANCHISING AND LICENSING Submitted by RABARI PINKESH 170143119022 RANA YASH 170143119023 RAVAL MITESH 170143119025 THAKOR SANDEEP 170143119027 VALAND NIRAL 170143119028 GOVERNMENT ENGINEERING COLLEGE BHARUCH

2. FRANCHISING Franchising is an arrangement where franchisor (one party) grants or licenses some rights and authorities to franchisee (another party). Franchising is basically a right which manufacturers or businesses give to others. This right allows the beneficiaries to sell the products or services of these manufacturers or parent businesses. These rights could even be in terms of access to intellectual property rights.

3. FEATURES OF FRANCHISING Firstly, under a franchising agreement, the franchisor grants permission to the franchise to use its intellectual properties like patents and trademarks. Secondly, the franchise in return pays a fee (i.e. royalty) to the franchisor and may even have to share a part of his profits. On the contrary, the franchisor provides its goods, services, and assistance to the franchise. Finally, both parties in a franchise sign a franchising agreement. This agreement is basically a contract that states terms and conditions applicable with respect to the franchise.

4. ADVANTAGES OF FRANCHISING A franchise can use franchising to start a business on a pre-established brand name of the franchisor. This further also helps in building a brand name, increasing goodwill and reaching more customers. franchising is a great way to expand a business without incurring additional costs on expansion. This is because all expenses of selling are borne by the franchise. sometimes a franchisee may get exclusive rights to sell the franchisor’s products within an area.

5. DISADVANTAGES The franchise does not possess direct control over the sale of its products. The franchisee may even leak the franchisor’s secrets to rivals. No franchise has complete control over his business. He always has to adhere to policies and conditions of the franchisor.

6. EXAMPLES OF FRANCHISING IN INDIA McDonald’s Dominos KFC Pizza Hut Subway Dunkin’ Donuts Taco Bell Baskin Robbins Burger King

7. LICENSING Licensing is defined as a business arrangement, wherein a company authorizes another company by issuing a license to temporarily access its intellectual property rights. i.e. manufacturing process, brand name, copyright, trademark, patent, technology, trade secret, etc. for adequate consideration and under specified conditions. For example: Under licensing system, Coca-Cola and Pepsi are globally produced and sold, by local bottlers in different countries.

8. The overseas company enters into a licensing agreement with another company based in the domestic country, for a specified period of time. The two primary reasons for entering in the licensing agreement are: International expansion of a brand franchise. Need for commercialisation of new technology. WHY LICENSING ?

9. BENEFITS Revenue Generation Brand Recognition Ownership of the IP The licensor gets the advantage of entering the international market at little risk. The licensee will benefit from superior technology to produce better quality products or established trademarks to better market his products.

10. DIFFRENCE BETWEEN FRANCHISING AND LICENSING You might have come across the term of franchising and licensing. As similar as two may sound, there is quite a lot of differences between the two You can see that while a license provides the licensee with the right use certain property for certain period of time. The franchise provides the franchisee with a comprehensive system for managing its business. Accordingly franchise agreement is typically a lot more prescriptive than a license agreement.

11. THANK YOU