DelMar Law Offices 

Michelle DelMar, Esq.

Free Consultation.

Call: (617) 728-9800

or Email Michelle DelMar, Esq.

Trademarks Contracts  Corp  501(c)(3)International Cannabis 

Understanding Franchising versus Licensing

Attorney Michelle DelMar

Focusing on Business, the Whole Business and

Nothing but the Business.

Trademark Attorney, Contract Attorney, Corporation Attorney

Michelle DelMar, Esq., Trademark Attorney, Contract Attorney, Corporation Attorney

Michelle DelMar, Esq.
Small Business Lawyer, Trademark Attorney and Executive Contract Lawyer.
Client Review Rating: “Preeminent” (5 out of 5)
 Peer Review Rating:  4.7 out of 5
Michelle DelMar, Legal Strategist for Top Growing Businesses, provides information,  guidance and services for small businesses:

Taking small businesses From Startup:

to Operation:

and Exit, Sale or Transfer:

Follow Me

Legal Info for Businesses

Business Checklists

Understanding Agreements

Want to Discuss your Business Issues? Click here to speak to Michelle Grenier and/or schedule a consultation.

Subscribe to our blog

Michelle DelMar, Esq.

Business Lawyer, Trademark Lawyer and Executive Contract Lawyer

Understanding Franchising versus Licensing

  • What is the difference between Franchising and Licensing?

License.  A License is permission or the right to do an act which, without such permission, would be illegal. Licenses are governed by "contract law."  Franchise Registration is not required for a License, so long as it does not fall within the scope of applicable Franchise Laws.  A license typically is a less expensive means to achieve the goal, than Franchising.

Franchise.  A Franchise is similar to a License except that a Franchise (a) is regulated by the government; (b) is based upon the "securities laws"; and (c) must comply with "franchise laws."  Franchise laws of some jurisdictions require that the Franchise register with the proper authorities.  A Franchise arrangment is typically a more expensive means to achieve the goal, than Licensing.

  • How to determine whether to take the Licensing or the Franchise path.

If the business opportunity falls within the scope of the applicable Franchise Laws, the Franchise will be required to comply with such laws.  However, if the business opportunity does not fall within the scope of the applicable Franchise Laws and if the factual situation permits, the License route may be available to Licensor/Franchisor.  If the License route is available, a License will likely be less expensive and less complicated route than a Franchise.

In some situations and according to some State laws, use of the License model cannot be done without violating Franchise Laws and in those circumstances, use of the Franchise legal structure is necessary.  Thus, Licensor/Franchisor may be required to comply with Franchise Laws and may be required to register the Franchise Opportunity in certain jurisdictions, prior to solicitation.

One significant difference between a Franchise and a License is the control factor.  That is, the extent of control that the Franchisor/Licensor has over the Franchisee/Licensee is one determining factor.  In the Franchise situation, the Franchisor dictates how the Franchise operates to produce a profit and in this way, the control is held by the Franchisor.

Other factors that may put the business opportunity within the scope of the Franchise Laws, include, but may not be limited to, (a) fees paid by Franchisee to Franchisor; and (b) Franchisee's right to use Franchisor's trade name and/or trademark.

Other relevant laws that may be applicable to the business opportunity offered by Licensor/Franchisor, include, but are not limited to, "Business Opportunity Laws" and "Seller Assisted Marketing Plan laws."  If Licensor/Franchisor wants to offer a business opportunity in a State that has such law, Licensor/Franchisor may be able to (a) obtain a waiver of the law; (b) comply with the requirements; (c) avoid the factual situation that would make the business opportunity fall within these laws; or (d) a combination of the foregoing.

 Click here to schedule a consultation with Business Lawyer, Michelle L. DelMar, Esq.


Related Articles:

Business Checklist 1

Franchise versus License Questionnaire 

Want to discuss your Business Issues with an experienced Boston business lawyer or Maine business lawyer?   

Click here to contact Attorney Michelle L. DelMar, Small Business Lawyer, Trademark Attorney and Executive Contract Lawyer.


This may be considered advertising under the Massachusetts and Maine Rules of Professional Conduct.




Similar posts
  • Trademark Registration, a valuable property investment.Many people come to me with their list of goals they want to achieve. In the past, their lists included investments in their retirement fund, stock investments, real property, etc. However, more and more clients are seeing the value in Trademarks, as intellectual property.