Licensing INSTEAD of franchising?

[svsv]

What is the name of your state (only U.S. law)? oregon

I have a startup biz and want/need to expand. Lets call it a mobile fast food biz. I have been planning on the franchise route. I know that's the common method. But after talking to a biz person from the SBA the other day, I am now thinking more about going the "Licensing" route instead. (less cost, less Fed regulation, faster, no registration with states, etc) In my limited knowledge, a license would typically apply to a tangible object. So I guess that's my question - can a biz concept or model be licensed instead of franchised? He seemed to be saying the Operation Manual, use of the biz name and marketing stuff is what's licensed. And if the licensee goes rogue and breaks the rules, they are in effect breaking the terms of the contract and I would be able to deny them use of the name - just like with a franchise situation. Sound right? Why isn't this more common instead of the typical franchise route. There must be a catch.

 

[justalayman]

you have very limited control over a licensee. A license is quite simply the contracted allowed use of some item, act, word, or what ever. In your licensing contract, you can specify certain controls but when you get too controlling, the licensee will start to question the value of the license.

as a licensor, you will have very little control over the licensees actual business and as such, it is much easier for a licensee to sully the name, product, or service you are licensing.

and unless your business model or concept is protected by either patent, trademark, or some aspect of copyright, why would anybody even bother to license from you?

 

[HomeGuru]

What is the name of your state (only U.S. law)? oregon

I have a startup biz and want/need to expand. Lets call it a mobile fast food biz. I have been planning on the franchise route. I know that's the common method. But after talking to a biz person from the SBA the other day, I am now thinking more about going the "Licensing" route instead. (less cost, less Fed regulation, faster, no registration with states, etc) In my limited knowledge, a license would typically apply to a tangible object. So I guess that's my question - can a biz concept or model be licensed instead of franchised? He seemed to be saying the Operation Manual, use of the biz name and marketing stuff is what's licensed. And if the licensee goes rogue and breaks the rules, they are in effect breaking the terms of the contract and I would be able to deny them use of the name - just like with a franchise situation. Sound right? Why isn't this more common instead of the typical franchise route. There must be a catch.

**A: there is a huge catch.