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    1 Reply Latest reply on Oct 17, 2012 8:14 AM by dpvesty

    Franchising vs Licensed Distributorship?

    adrianc Newbie

      I would like to expand my business as either a franchise or a licensed distributorship. My research so far tells me that the franchise route is rather costly. I believe that I could structure my business offering to qualify as a distributorship as I will not be asking a large up front fee.

      I've seen low cost franchise doc fill in templates as well, but am skeptical of their acceptability. I would be interested in what others have found.

        • Re: Franchising vs Licensed Distributorship?
          dpvesty Newbie

          A lot depends on the type of product or service being offered and the expectation levels associated with each.  Franchising systems typically promise to provide an infrastructure that can be adapted by a local franchisee for the price of admission.  This might include branding, website site support, lead generation, favorable discounts on products, and perhaps even technical support.  These are all things a new business would eventually get around to -- the franchise promise is that this is available day one.  There are also legal expenses to consider since franchises are regulated by the Federal Trade Commission (Franchise disclosure document - Wikipedia, the free encyclopedia).

           

          With licensing, the expectations are lower.  A licensee expects product that works and support if it doesn't but not much else.  Marketing and branding in particular may not be an issue for this type of product.  Legal expenses would need to cover the license contract and amendments.

           

          I am a franchisee of a video surveillance company.  I have never licensed a product in the sense you are describing here.  Please take these comments for what they are worth.