Franchising vs.

Licensing
International Entry Options
Basically, franchising means that you're allowing another person to duplicate your business
in another location, and licensing is when you allow someone else to sell your products.
With both licensing and franchising, you will receive a fee from the person duplicating your
business or selling your product.

Franchising ‫حق االمتياز‬ Licensing ‫الترخيص‬

• Grant a franchise for the sale of (goods) or the
operation of a (service)
• Under a franchising agreement, the franchiser
grants rights to another company to open a
retail store using the franchiser’s name and
operating system. In exchange the franchisee
pays the franchiser a percentage of its sales as
a royalty.
• Franchising provides an opportunity for a firm
to establish a presence in countries where the
population is not sufficient for major
expansion.
• Licensing can be defined as a contract or
agreement between two companies, where
one company permits another company to
manufacture its products under specified
conditions and for a specified payment.
• Under licensing agreement, the licensing firm
grants rights to another firm in the host
country to produce and/or sell a product. The
licensee pays compensation to the licensing
firm in return for technical expertise.