Licensing vs franchising business plan

If you get it right, it can turn your business into a global brand and significantly increase the value of the business. Increasingly, more and more businesses are turning to franchising to enable them to move into regions, countries and continents where their products and services are in demand.

Licensing vs franchising business plan

licensing vs franchising business plan

Sure Bet or Risky Business? Germain Jan 23, 4: The World Wide Web is overflowing with Internet-based businesses for sale. An online search of the term "Internet franchising" will reveal dozens of Web sites promising both online business and franchise opportunities in a variety of Internet-based companies.

The listings go on and on. They include the promise of success and fortune for every conceivable type of business. However, just as prospective franchise signers should not plunk down thousands of dollars based on a newspaper ad, would-be entrepreneurs should also not be too hasty to click their way to online storefront ownership.

Getting involved in an Internet franchise could be riskier than surfing the Web without a firewall. A safer approach is to investigate short-term, renewable partnership affiliations rather than more costly franchises. Those who join a franchise use a prescribed method for distributing products and services supplied by the business plan of the franchise company.

Franchising is replete with many misconceptions. Among the biggest is that obtaining a franchise is equivalent to buying the franchise or owning the business. This is not the case. Franchisees invest their assets in a system to utilize the brand name, operating system and ongoing support, the Franchising.

All franchise participants are licensed to use the brand name and operating system in exchange for paying the initial and monthly franchise fees and other charges specified in the franchise agreement.

His online business develops, deploys and manages e-business applications and services over the Internet. He saw lots of companies using a franchise business model and going bankrupt in the process. He favored a partnership with other firms seeking to grow related online business offerings.

Proprietary businesses such as partnerships have a competitive advantage, Harpointner found. From his view, bad business models do not franchise well. We decided against franchising," he said. Partnerships Over Franchises InHarpointner launched channel partnerships through his Web site.

Rather than charging partners monthly fees as franchisers must pay, he said his partnership participants share all benefits of being in business without the downsides of a franchise. For example, those involved in a franchise cannot diversify their business.

Instead, they must adhere to the company line. Partnerships work better on the Internet," Harpointner said. We see many of our partners discovering the benefits of partnering over franchising.

Their business has no physical location and no brand names to boost their business. Instead, a franchiser's Web site looks like everyone else's site.

Plus, there are high royalty fees and monthly franchising fees. In addition, franchisees must sign long-term contracts that include default penalties. Chuck Fuller, senior vice president for marketing development at Entrepreneur.

The cost per lead is a lot less on the Internet, but the lead quality it produces often suffers quite a bit. Fertile Networking Franchising versus partnering on the Internet are not the only options.

There is more opportunity using the Web as a vehicle for more traditional consulting and networking services, said Vincent Thompson, principal at Middleshift. His company focuses on using or creating revenue for Internet businesses by empowering those in the middle-management environment.

Thompson believes that any time an entrepreneur can use the Web to sell is a good thing. He sees people submitting content to Web sites and participating in Web networking activities.

This forms the biggest use for business over the Internet. After spending seven years at America Online running Internet sales in the western U. There will be more networking on the Web instead of franchising, Thompson predicted. The Internet has changed drastically since then. Business[es] online need much more than [what] is available through a franchise," he added.The popularity of the franchise business model has to do with its proven track record of success and ease in becoming a business owner; however, while the success rate for franchise-owned businesses is significantly higher than for independent businesses, no individual franchise is guaranteed to succeed.

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Business Opportunities: The Key Differences You Should Know. March 7, A franchise is defined as the right or license granted by a company (franchisor) to an individual or group No business venture is immune to failure without a sound business plan and a lot of hard work.

For these reasons, do extensive research, ask. Franchise vs Licensing – Whether you choose to embark on an Affiliate Franchise or the most popular franchise around, Business Format, you will experience several franchise advantages and disadvantages. As stated before, a franchise is defined as a contractual agreement in which the owner of a.

Here are a few of the basic steps in expanding your business through franchising: Write a detailed business plan that includes a business history, current market analysis, company vision and financial projections. Register your trademark or service mark to protect against infringement.

- Licensing vs. Franchising LICENSING Licensing is Lower Cost and Can Be Done Quickly.

As you consider your decision to go into to business vs. licensing your idea, there are three main factors to consider: Going into business: Another valuable tool that can help is the One. Franchising is a typical North American process for rapid market expansion but it is gaining traction in other parts of the world. Franchising works well for firms that have a repeatable business model (eg. food outlets) that can be easily transferred into other markets. In a broad financing program, the franchisee may use the name or sell the products of the franchisor, including the plan for managing and operating the business. The most obvious advantage of getting a franchise is that it is like getting a business in a box.

If you are thinking about expanding your operation through franchising, licensing may be an alternative because (1) it is substantially less expensive, and (2) it takes about ten to fifteen business days to complete rather than months and months for.

According to, franchising is a business strategy for getting and keeping customers. Those who join a franchise use a prescribed method for distributing products and services supplied by the business plan of the franchise company.

Should You License or Franchise? |