Licensee vs. Franchise… Know The Basics

The difference between a licensee opportunity and a franchise is a fine line these days. What you don’t know can come back and hurt you.

As a new entrepreneur, you have to understand how to manage any new hires, tax laws and all the basic functions of business technology and software that were once done by the “in-house” technical guru where you used to work. Additionally, you now must wear many other hats that you aren’t used to wearing to avoid any legal issues; hats that often get overlooked at the onset of buying a new opportunity.

The FTC (Federal Trade Commission) defines a licensee business opportunity differently than a franchise but, as mentioned, there is a fine line between the two. A licensee opportunity comes with a lot less strings attached than does a franchise. Be aware though that many licensee opportunities don’t have the same level of training or support that you’d receive if you were to buy a franchise. In addition, many licensee opportunities are really a franchise from a legal perspective, just wearing a slightly different name. So make sure to do your homework before you buy.

And don’t make the mistake of thinking the terms licensee opportunity and franchise are synonymous, they’re not; and not knowing the difference between the two can be a small business nightmare in the making.

Carpe Diem My Friends!

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