A Proven business model to be taken to different locations requires clear understanding of licensing terms involved with its intellectual properties. Intellectual property includes trademarks, copyrights, know-how, trade secrets, business concepts, methodologies, designs, Promotional materials, marketing systems, logos, patents, etc., The franchising concept involves more than just protecting of Intellectual property rights. A right ecosystem should be created that nurtures the franchise industry and the relationship between franchisor, franchisee and third parties involved in franchising. The Trademark registration in multiple countries should enable a franchisor to manage and renew through centralised systems. The International Design system which includes registered industrial designs should enable your management to record and renew changes in multiple countries with much ease. Understanding the Costs associated with the Patent Protection in different countries is also important. Basically there are two types of franchised business they are
- Product & Trade name franchising where in the franchisee uses the franchisor’s trade name (including trade marks) to sell franchisor’s products or services.
- Business format franchising in which the franchisee uses the franchisor’s complete business concept (trademarks, goodwill, trade secrets, etc.,). So to summarise franchising is a technique of sharing systematically franchisor’s Intellectual property to distribute its products and services.