Question

what do you think is better for the companies franchising or licensing ? explain based on your understanding

Answer 1

Answer 1)

Franchising: Organizations for the most part begin franchising once their plans of action have been consummated and demonstrated to bring in cash and their brands have probably some provincial acknowledgment. In this way, in addition to the fact that you get to use the brand's name, however you additionally gain admittance to all its emotionally supportive networks in return for an expense. In franchising, you maintain your business the manner in which you're told to run it on the grounds that the franchisor doesn't simply hold command over the licensed innovation (the brand), it likewise holds power over how the establishment business is worked. You set up the cash-flow to begin the business, yet the franchisor supplies you with the skill to run the activity as per their plan of action.

Licensing: At the opposite finish of the range is the licensing model, where you pay for the utilization of the protected innovation, yet you are allowed to maintain your business anyway you like. The brand that gives you the permit may indicate the reason their protected innovation is to be utilized, however they won't give you any help like site choice, preparing, advertising or any of the other emotionally supportive networks you appreciate when you are a piece of an establishment system. Often, a licensing understanding is gone into between a brand and somebody who has a current business who simply needs to grow their product offering, so this absence of help probably won't be a serious deal to individuals with a built up business.

Now let’s talk about which one is better:

1) While licensing understandings can be drawn up and set up rapidly and for little expense to a brand, franchising understandings take much more work. Which one works best for you will rely upon how much power over the running of your business you need to hold and how much help you need. At the point when you permit a brand, you do get the advantage of whatever brand acknowledgment it has earned, yet you are practically all alone for maintaining the business. Once more, this may not make any difference in the event that you as of now have a set up business.

2) At the point when you establishment, you get the advantage of brand acknowledgment, yet in addition a great deal of help in the running of the business inside a set framework. On the off chance that you have your own business as of now and choose to join an establishment, this will mean surrendering control of how you right now maintain your business.

3) Another thought is cost. A licensing understanding will be less expensive than going into a franchising understanding. Notwithstanding, since you get practically zero help when maintaining a business with a licensing understanding, you will be liable for every single other expense related with the business, which would typically be remembered for a franchising charge.

4) For instance, with a licensing understanding, you would need to rent or own the structure yourself, do all your own advertising and preparing. In an establishment, the franchising charge would cover the rent and buildout, it would almost certainly get you some national advertising from the brand and the establishment would probably have preparing for you and your staff. This may make maintaining a business with a licensing understanding and running an establishment equivalent cost insightful.

What's more, in conclusion, there is likewise the matter of lawful insurance. There are explicit franchising laws set up in six areas in Canada to ensure franchisees. Licensing understandings are not secured by these laws, albeit at times a licensing understanding can really wind up being seen lawfully as a franchising understanding.