When is a license not just a license, but also a regulated franchise? If you’re expanding your enterprise through the authorized use of your trademarked products or services, you may think [*CO]‘I don’t need a franchise, simply make it a license agreement;’ or’A trademark license isn’t a franchise is it?’ or’I desire to line up dealers, those aren’t franchises, are they?’ This article tries to answer these questions.

Franchise laws have been applied to contractual relations that to some appear far removed from the traditional franchise industries, including software licenses, merchandizing licenses, and web technology licenses.

If a relationship is a franchise, franchise laws may regulate pre-offering notification, may require registration with and approval by a regime agency, and may regulate the contract and the relationship, including territory, transfer, termination, and renewal.
What Is A Franchise?
The dictionary definition of what is a franchise under law varies significantly from country to country, and from state to state. The definition that applies thru the US by the virtue of the federal Trade Commission Rule (‘FTC Rule’ ), is that a franchise is an oral or agreement in writing ( or series of agreements ) that contains each of the following three elements :
One ) The franchisor offers the right to distribute goods or services associated with or identified by the franchisor’s trademark or other commercial symbol ;
2 ) The franchisee is required to make any direct or indirect payment to the franchisor or its affiliates ( except only a bona fide wholesale price for goods for resale ) ; and
3 ) The franchisor exercises significant control over, or offers significant assistance to, the franchisee ( in some states this is defined as a promoting plan or as a continual commercial relationship between the parties ).
four ) The parties’ written characterizations of the nature of the relationship aren’t binding.
The U.S. State and Fed business opportunity laws also alter in their scope, but generally require pre-offering declaration and registration of offers of help or promoting plans to enable others seeking to build a business, without or with a trademark license. State sales agents laws also provide protection to commissioned agents, referring to payment of commission and termination rights. When considering franchise laws, include in your research these related industry, agents, sales agent, and business venture laws.

Licensees may be Franchisees

V. The Act outlines a franchise to be a relationship where a franchisee : ( 1 ) has the legal right to use the franchisor’s trade name or commercial symbol, ( 2 ) shares a’community of interest’ with the franchisor, and ( 3 ) is needed to pay a fee to the franchisor.

Profran Consultants has been developing enterprises as franchises for over thirty years. Call for FREE consultation with Ken Hollowell. Profran Consultants can offer strategies for paying for your project too.
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Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

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