We are always asked which is better, licensing or franchising...

You first need to know the difference between the two before you can decide...

Licensing:

• Licensees are not authorized to use your Trademark and must operate under a different name, however they may use the terms Authorized Distributor or Authorized Dealer
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• Licensees must not be substantially identified with your trademark. In other words, your product(s) must not represent a substantial percentage of their sales
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• Products are sold at wholesale prices and no additional fees, such as monthly royalty fees, should be charged

Franchising:

• Franchisees must use your Trademarks
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• Franchisees are charged weekly or monthly royalty fees

As a general rule...

Licensees are established businesses looking for additional products or services.

Franchisees will only be selling your products and services.

Warning: If it looks like a duck; smells like a duck; walks like a duck; talks like a duck; it will surely be considered a duck by the authorities. In other words, if you call yourself a license but are operating as a franchise as outlined above and have not properly filed or registered as a franchise, there may be stiff penalties and, in fact, in some States it is considered fraud and punishable by jail time!