Distinguish between licensing and franchising.

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Solution

Basis of difference

Licensing

Franchising

Business model

The licensor grants licence to a foreign company (licensee) to produce and sell goods under the licensor’s logo and trademarks for a fee.

The franchiser grants a foreign firm (franchisee) the right to operate a business using a common brand name for an initial or a regular fee.

Type of exchange

Operations are related to production and marketing of goods.

Operations are related to the services business.

Stringency of rules

Less stringent rules and regulations

Strict rules and regulations

Examples

Pepsi and Coca-Cola

Dunkin’ Donuts, KFC

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Similar questions

Distinguish between the following.

Licensing and Franchising.

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Basis of difference	Licensing	Franchising
Business model	The licensor grants licence to a foreign company (licensee) to produce and sell goods under the licensor’s logo and trademarks for a fee.	The franchiser grants a foreign firm (franchisee) the right to operate a business using a common brand name for an initial or a regular fee.
Type of exchange	Operations are related to production and marketing of goods.	Operations are related to the services business.
Stringency of rules	Less stringent rules and regulations	Strict rules and regulations
Examples	Pepsi and Coca-Cola	Dunkin’ Donuts, KFC