Licensing and Distribution

Short of franchising your business, there are two other common expansion methods: (1) licensing, and (2) distribution.

Licensing

Licensing occurs when a licensor grants a licensee the right to use the licensor’s trademarks for a specified fee. It does not entail the licensing of the business system per se, which occurs under a franchise. Accordingly, the licensor has less control over the licensee’s operations.

Distribution

Under distribution, a manufacturer or supplier of products uses an independent distributor to market and sell its goods. Generally, the distributor purchases the goods in bulk and markets and sells smaller quantities thereof under its own name, which has no connection to the supplier. Similar as with licensing, the distributor generally has control over how to operate its business.

If you are interested in expanding your business through licensing or distribution models, please contact us.