Licensing & Franchising

Licensing and franchising are similar in some ways. Both licensee and franchisee get the use and benefit of the “name” or “mark.” Both also have to pay to the licensor or franchisor a fee or royalty for use of the “name” or “mark”. The main difference is phrased “significant control”. Unlike a franchisor, by law, a licensor cannot have significant control over its licensees. Licensees own the equity in their clientele and run their business as they see fit. There are no advertising requirements, quotas, or restrictions on vendors or sub-contractors. Upholding the reputation of the “name” and payment for the use of the “name” or “mark” is all that is required.

Licensing is generally much more affordable than franchising with much larger territories. For example, a Budget Blinds franchise sells for approximately $95k for 33,000 households–at best that will be 130,000 to 150,000 people. The smallest Cover Your Glass territory in the Phoenix, AZ area has over 600,000 people, and three territories have over 1 million people, all with established residential and commercial clientele. License and franchise laws differ from state to state, but the main difference, other than getting much more for much less, is “significant control” -  you keep that.