This is a very good question and one I get asked often. Many peoples are genuinely confused about the terms franchising and licensing and often use them interchangeably.
Business owners tell me that they want to license their business rather than venture down the franchising path.
They believing that licensing has much of the same advantages as franchising but without the costs and regulations. Unfortunately this belief is wrong. So to help dispel the myths here is a brief summary of the facts:
Licensing is a broad umbrella terms that describes a range of business models where a business owner can leverage their growth.
The major distinction between a franchise and other types of agreement which involve some kind of licensing of rights is the issue of the use of the trade name and logo; and business systems.
While you can call your business whatever you like – a license, a franchise, or a distributorship the real distinction is NOT in the NAME but in the AGREEMENT itself
If ANY agreement contains the following 4 criteria then irrespective of whether you call it a license, an agency agreement or a franchise the LAW deems it as a franchise and so requires compliance with the Franchising Code of Conduct.