The differences between franchising and licensed trade are as follows:

1. Different definitions: Franchising means that investors license their trade names to operators under certain conditions , allowing him to engage in the same business as the authorized person within a certain area. License trade refers to a trade method in which the licensor and the license recipient sign a license agreement, allowing the other party to use a certain new process, new technology, patent right or trademark of the company for production, and charging the other party a certain fee.

2. Different relationships: Franchise is a kind of business right, and license trade is a kind of business certificate. Different from the parent-branch relationship between the franchisor and the franchisee, the licensor and the licensee of the license are in a cooperative relationship.

3. Different purposes: the license trade entry mode is to circumvent import barriers, and the franchise entry mode is mainly to expand the enterprise.

4. Different scope of provision: Franchise entry model Xu Fang not only provides product trademarks, but also provides the licensor with a complete set of management and marketing systems to ensure the market competitiveness and viability of the franchisor. License trade may turn the licensing party into a strong competitor and lose control of marketing plans and programs in international target markets.

The similarities between franchising and licensed trade are as follows:

1. You can expand your company’s market competitiveness by absorbing the advantages of other companies and by providing standardized management and business models. production, achieve a larger-scale sales chain, reduce costs and financial risks, and maximize corporate value.

2. Improve the patent law and licensing legal system, and increase the supervision of licensing exporters.

3. The scope of the license needs to be clearly defined to prevent technology leakage. The importing party of a technology transfer agreement may become a strong rival of the exporting company in the future.

Baidu Encyclopedia - License Trade

Baidu Encyclopedia - Franchise