Education Center

Licensing

Licensing agreements grant the rights to use a method or technology, equipment, products, services, and the supplies needed to set up and operate a business. A license agreement may or may not involve the granting of trade names and trademarks and the training and ongoing support with operating procedures. In today's world very few business can be expanded via licensing.

The advantages of expanding your business through licensing include:

• You can enter new territories without having to risk large sums of investment capital required in creating a franchise system.
• You can enter into new markets with others that are managerially qualified to produce, market, and distribute your products.

The disadvantages of this method include:

• State regulatory bodies now view what used to be ideal licensing opportunities as franchises.
• The licensee retains most of the profits, not the company granting the license.

Click here for more information on licensing.