Modes of entering International Business:-

Licensing & Franchising

1
 SUBMITTED TO
Asst. Prof Neha Gupta
Submitted by
Riyanka Nanda
Rudra Das
Rudra Prashad Barik
Rosalin Pattanayak
Prity Asopa
Sakshi Agrawal
Sahasranshu Panda
2
 licensing

Types of licensing

Example of licensing

Pros and cons of licensing

Franchising

Types of Franchising

Example of Franchising

Pros and Cons of Franchising

Difference between licensing and franchising

Conclusion
 ◆ A license is an official permission or permit to do,
use or own something .
◆ Licensing defined as a business arrangement,
wherein a company authorises another company by
issuing license to temporarily access its intellectual
property rights, i.e. Brand name, patent.
◆ Licensor- permit to use its intangible assets
◆ Licensee- firm to whom license is issued.

4
 character
Brand and
Patent and Vehicle Mass
trademark
licensing artwork licensing licensing
licensing
licensing

5
 Starbuck and nestle
◆ In may 2018,Nestle agreed to pay $7.15 billion in
cash to Starbucks for exclusive rights to sell
Starbucks’ products.
◆ For Nestle, the company gained access to Starbucks’
products and strong brand image..

6
 Dassault Rafale
◆ Took place in September 2016
◆ Dassault aviation sold 16 aircraft to India
◆ Committed to offset in India worth 50% value purchase
◆ Dassault chosen to make partnership with Reliance Group.

7
 CONS
PROS
√ Creates an opportunity Creates a dependency
for passive income. upon the licensor.
√ Creates new business Offered for a limited time.
opportunities. Creates added
√ Reduces risks for both competition in the
parties. marketplace.
√ Creates an easier entry Not a guarantee of
8
into foreign markets. revenues.
 ◆ A franchise is a business whereby the owner licenses its
operations—along with its products, branding and
knowledge—in exchange for a franchise fee.
◆ Franchisor- owns the rights of the business.
◆ Franchisee- Party that is purchasing the right

9
 Business
Product Manufacturing
Format
Franchises Franchises
Franchises

10
 McDonald’s
◆ Fast food restaurants
◆ 36,615 franchises in 119 countries
◆ Founded in 1955
◆ Franchising started in1955

11
 Marriott International
◆ Hotels
◆ Business began in 1967
◆ Franchising in 1967

12
 CONS
PROS
√ Minimum risk Lack of independence
√ Competitive edge Restrictive
√ Guidance and support Share in profit
√ Previous experience is Franchisor monitoring
not needed

13
 Basis Licensing Franchising

Business Model Deals with Products & Deals with providing

Goods Services
Ownership With the licensee With the franchisee

Legal regulations Contract Law Securities law

Support and Not provided Provided by franchisor

training
Control Licensor does not have Franchisor exercises
control over licensee control over franchisee
14
 √ Though both share similar advantages, licensing can be called a
subset of franchising; i.e. a typical franchising arrangement
would involve numerous licensing agreements to transfer the
use of intellectual property rights.
√ Overall both forms are pretty safe & legit mode of doing
business since it’s built upon the solid foundation of the brand
value attached to the product and can be used as a Launchpad
by any potential new entrant to gain access in an already
saturated marketplace.

15
16