Licensing and franchising

Increase your profitability and competitiveness with licensing or franchising

Licensing and franchising are both forms of commercialising your intellectual property: your products, how they’re made, the service levels and training employees need to have, how your shops are decorated and set out are all key parts of your business that you can capitalise on.

If you become a franchise, you essentially allow someone else to open a business and sell your products or services using your brand. This means that you can have another business premises operating under the management of another person under your brand identity. You will need to spend time recruiting the right people for your business and have a consistent management system in place to ensure the successful running of your franchised business. You keep lots of control over the operations and processes of the new business, and take a percentage of the profits.

When you license your business, you lose a bit of this control. You sell your brand, designs and processes to usually smaller businesses for them to use. It can be really great for your business, as you significantly increase the number of people who use your product or service and make bigger profits. If you have a unique system for manufacturing a product for example, you could license your technique to other manufacturers. 

Both are a great way to increase your business profits. With a license, you’ll receive regular payments from other businesses for the use of your process. If you franchise your business, you’ll be able to take a percentage of the profit each franchise makes.

You’ll also be able to minimise the risks associated with business expansion by licensing and franchising. Your profits will increase as you take fees for your license or a percentage of the profits from your franchise and you won’t face the same financial risks of manufacturing, promoting and selling your product directly. You’ll be able to use the increased profits to develop new products or services for your business.

The risk is distributed between you and your partners. When developing new products, processes or services for your business, the licensee or franchise manager won’t face the same uncertainty around investment in an untested product or service. As your profits increase, you can afford to invest in research and development to further expand your business, which can then be distributed throughout your franchises.


Find support

If licensing or franchising your business is something that you would like to explore, there’s lots of support you can access. How’s Business, the Growth hub for York, North Yorkshire and East Riding, can help you get the right information and funded support you need to commercialise your intellectual property. Get in touch with one of the support team at How’s Business by emailing

Through How’s Business, you can be introduced to the providers of support and funding to facilitate your business growth. There are a number of programmes that can offer funded support and advice to help you license or franchise your business. Ask about SparkFund, the Manufacturing Growth Programme and Exporting for Growth to find out what you could be eligible for.

You might also want to check out the support available through the Intellectual Property Office, as you’ll be commercialising your intellectual property and will need to ensure it is protected by the law. Their website site is full of useful information to help you understand your rights and protect your property. They host workshops and master classes to give you the knowledge you need to protect and defend your intellectual property rights.

It’s also a good idea to speak to a lawyer about your business. Someone with a good understanding of intellectual property law would be ideal, but you might also want some support about international product and service standards and legislations, as different countries are governed by different laws. You intellectual property protection is also geographically located, so your assets won’t necessarily be covered if you export.

Published: 19 June 2017

Article by Special Feature: How's Business
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