Question

Distinguish between licensing and franchising.

Answer 1

(i) Licensing is an agreement between licensor and licensee whereas franchising is an agreement between franchisee and franchiser.

(ii) Licensing means permitting other party in a foreign country to produce and sell goods under trademark, patents whereas franchising means sell or distribute the branded products in a specific geographical area, e.g., through its franchising system McDonalds operates first food restaurants in the whole world.