One of the disadvantages for a franchisee is the loss of control. While it`s your business, most important business decisions are made or at least need to be approved by the franchisee. While this help can be beneficial for learning the ropes of the business, one can also feel like you are being micro-exploited by experienced business owners. However, this control is a professional for the franchisee since he can still dictate how his brand is used. Whether you opt for a franchise or a license depends largely on the control and degree of ongoing responsibilities you are willing to entrust to your company. Even though a franchise system gives you greater control, it also involves larger current obligations than franchisors. If you opt for a license for your company, you will keep your license agreement simple. Avoid including clauses relating to the brand and appearance of the licensee`s business, otherwise you will stick to a franchisee`s standard. If you have any questions or need help creating a franchise or license agreement, contact LegalVision`s lawyers at 1300-544-755 or fill out the form on this page. If you answered yes to all of the above points, you`re probably working under a franchise agreement. Whether you have an agreement with another name, you are still considered a franchise.
In all of these examples, the license grants a limited right to a particular asset, whether it is a trademark, technology, or formula. The agreement that establishes the relationship between the licensee and the licensor is called a “licence agreement” and, while the agreement limits what the licensee can and cannot do with the licensed asset, the licence agreement does not allow the licensor to exercise control over the overall operation of the licensee`s business. While Disney has a say and controls how McDonald`s brands use Disney`s brands on McDonald`s Happy Meals, Disney has no control over all of McDonald`s business. Did you know that if you buy a pair of Calvin Klein underwear, it`s not really made by Calvin Klein? The only clothes that the Calvin Klein company makes itself are some of its women`s lines. Any other Calvin Klein brand garment you buy, including perfume and jeans, as well as its famous underwear, is the result of a licensing agreement. The manufacturers of these products are licensed with the Calvin Klein name and logo to sell their own products….