Brand licensing is an important means to use the brand to expand the business market and business scale. There are two main models of brand licensing: trademark licensing and franchising.

1. Trademark licensing

1. What is trademark licensing?

Trademark licensing is a common brand licensing operation method, which is established under the intellectual property system. business alliance or cooperation. The trademark owner allows the licensee to use its trademark to manufacture and sell products of a certain brand. The function of trademark licensing is to open new markets for one's own products or services by licensing others' trademarks; to open markets for the company's products or services or expand existing markets by licensing others to use one's trademarks.

In the case of licensed manufacturing, the company's product design must be reviewed by the brand licensor, and the quality of the products produced is also strictly controlled by the licensor; if there is a lack of quality control of the products produced by the operator, Will cause damage to the goodwill of the authorized brand. In the case of licensed sales, the licensor mainly controls the product sales advertising, sales price, region, after-sales service, etc. If it is sold at a low price or there are problems with the service, it will damage the value of the authorized brand.

2. How many forms of trademark licensing are there?

(1) Exclusive licensing means that only one licensee is authorized to use the trademark to carry out agreed business activities. The trademark cannot be used in this territory.

(2) Exclusive license, that is, the licensor only authorizes the licensee to use a trademark during the duration of the trademark use contract, but it still retains the right to use the trademark in the region.

(3) Ordinary license, that is, the licensor licenses the licensed trademark to multiple companies for use in the same region. At the same time, you can also use the trademark yourself.

3. What are the key points of a trademark license contract?

(1) Contract name, names and addresses of both parties, as well as the date and place of signing the contract.

(2) The licensed trademark, registration number, and trademark pattern.

(3) The scope and quality standards of the licensed products, the period of licensed use, the geographical scope and the method of use.

(4) Product quality assurance and supervision responsibilities.

(5) How to provide, use and print the trademark logo.

(6) In the form of marking the company name on the goods, the licensee shall indicate its name and the place of origin of the goods on its goods in accordance with regulations.

(7) Trademark licensing fees and payment methods.

(8) Termination and rescission conditions of the contract.

(9) Liability for breach of contract.

2. Franchise

1. What is franchising?

Franchising is a very important way of brand licensing. It is different from a separate trademark license in that it is a package license with the trademark as the core and including trade secrets, etc. Under franchising, the franchisor is a management company that owns intellectual property rights such as trademarks and trade secrets. It recruits and franchisees franchisees to use the franchisor's trademarks, trade secrets, etc., and engage in the same business activities with a unified business model and style.

The main texts of the franchise include:

(1) Franchise agreement;

(2) Franchise manual;

(3 ) Brand logo usage specifications;

(4) Trade secrets or business standards specifications.

2. What are the risks of franchising?

(1) The franchise project is not mature. Some franchise projects have never even been operated by the franchisor, but just want to sell a certain business concept to franchisees, or rely on sensational advertising or attractive profit sharing or investment returns to lure investors into joining.

(2) There may be legal traps in franchise contracts. In franchising, the franchisee is usually at a disadvantage and there are some unfair terms in the format contract provided by the franchisor that are not beneficial to the franchisee.

(3) Franchise business operation issues.

The advantage of franchising lies in large-scale, standardized and systematic operation, which requires the franchisor to have a complete franchise system. However, some franchisees fail to provide the services promised in the contract or have problems in operation, resulting in franchisees operating at a loss or even Had to terminate the contract.

3. How to avoid franchise risks?

When choosing whether to join a franchise system, you must carefully consider the following issues:

(1 ) Does the franchise project have good prospects? It is necessary to examine the franchise project to see if it already has a good operating foundation and history, and whether it has room for growth.

(2) Does the franchisor have a good reputation? To understand the franchisor’s economic strength, management level, enterprise scale and unique advantages, etc., you can consult the franchisor with relevant institutions and existing franchisees when necessary. credit standing and project status.

(3) Is the franchise operation system complete and smooth? It is necessary to understand the quality, teachability, characteristics and sustainability of the products or services of the franchise project, especially whether the support system is complete and smooth.

(4) Does the franchisor have legal intellectual property rights? The core of franchising is the intangible property with trademark as the core. If there are infringement or illegal factors in the franchisor’s trademarks, trade secrets, etc., it will affect the entire franchise. Business operations will be a fatal problem.

(5) Is the franchise contract fair and reasonable? For example, whether the franchise fee (franchise fee) is too high, whether there are obviously unfair and unreasonable terms, whether the conditions for rescission and termination of the contract are reasonable, etc.