Education Center
Expansion: Five Paths to Business Opportunity:
- Franchising
- Distributorships & Dealerships
- Sales Reps & Agencies
- Licensing
- Multi-Level Marketing
Expansion: Five Paths to Business
Opportunity
More about licensing
Through the use of licensing agreements, successful businesses give
other businesses or individuals the right to use any or all of the following
intellectual property, assets, or systems:
- trade names,
- specific manufacturing processes or technology,
- technical procedures,
- selling methods,
- special equipment,
- services, and/or
- products.
In some cases, the granting business also teaches individuals (i.e.
licensees) to use its methods, and follow established technical procedures,.
It may even make available the necessary equipment and supplies for
establishing and operating the licensed business. Some companies also
offer new business owners the right to operate using the company's trade
names.
A classic example of successful licensing occurs in the pharmaceutical
business. There, manufacturers and/or owner of patents grant a license
to companies or individuals to produce and sell its medicines and other
pharmaceuticals within a given territory. These cases usually involve
the granting of manufacturing processes and trade names and do not cover
the operation of the entire business.
An advantage of licensing agreements is that individuals acquire everything
associated with a particular products or service. However, beyond protecting
the use of trade names and ensuring product quality, the licensing company
is generally not concerned about controlling how or when the licensee
operates the business. Training is restricted to product knowledge and
normally occurs only when the parties enter into the agreement. There
is generally no ongoing operational support provided.
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