Beyond these advantages, the disadvantages of international franchising are as follows: license agreements are used whenever the owner of an object, such as an invention, trademark or product, wishes to grant someone else the right to use and manipulate that object. The licensee`s rights are dictated by the agreement, but may also include rights such as the sale of the item or the use of the trademark on its own products. In return, the Product Owner or Licensor receives royalties on all winnings earned. Often, the classes of licences overlap and are not mutually exclusive. Generally speaking, the topics covered by a licensing agreement are as follows: if there is a licensing agreement, the licensor can introduce his product into new markets much more easily than if he did the work alone. It is much easier to enter foreign markets in this way, as licensing allows intellectual property to skip the limit requirements. This means that tariff barriers to market entry can be avoided, since a national company uses IP, just as the licensor could use IP on the national territory. In a typical license agreement, the licensor undertakes to make available to the licensee intellectual property rights such as the licensor`s technology, trademark or know-how. In exchange for the licensor`s intellectual property, the licensee generally applies to a prior royalty and/or a royalty to the licensor. A royalty is a current royalty paid for the licensor`s right to use the intellectual property. The simplest example of a franchise agreement is in the fast food sector.

If you go to a McDonalds or Donuts dunkin, you will see a very similar, even accurate, branding and product line business model. This information is dictated by the franchisee. While the franchisee runs the day-to-day operations, the franchisee has considerable control over the process. In this way, the franchisor retains more control over the service than a licensor over the manufacture of a product (Sharma, ed). . . .