The verb license or grant license means to give permission.

The noun license (licence in

British and Canadian spelling) refers to that permission as well as to the document
memorializing that permission. License may be granted by a party ("licensor") to another
party ("licensee") as an element of an agreement between those parties. A shorthand
definition of a license is "an authorization (by the licensor) to use the licensed material
(by the licensee)."

Intellectual property

A licensor may grant license under intellectual property laws to authorize a use (such as
copying software or using a (patented) invention) to a licensee, sparing the licensee from
a claim of infringement brought by the licensor.[1]

A license under intellectual property commonly has several component parts beyond the
grant itself, including a term, territory, renewal provisions, and other limitations
deemed vital to the licensor.

Term: many licenses are valid for a particular length of time. This protects the licensor
should the value of the license increase, or market conditions change. It also preserves
enforceability by ensuring that no license extends beyond the term of IP ownership.

Territory: a license may stipulate what territory the rights pertain to. For example, a
license with a territory limited to "North America" (United States/Canada) would not
permit a licensee any protection from actions for use in Japan.

Mass licensing of software

Mass distributed software is used by individuals on personal computers under license

from the developer of that software. Such license is typically included in a more
extensive end-user license agreement (EULA) entered into upon the installation of that
software on a computer.

Under a typical end-user license agreement, the user may install the software on a limited
number of computers.

The enforceability of end-user license agreements is sometimes questioned.

Trademark and brand licensing

A licensor may grant permission to a licensee to distribute products under a trademark.

With such a license, the licensee may use the trademark without fear of a claim of
trademark infringement by the licensor.

Artwork and character licensing

A licensor may grant a permission to a licensee to copy and distribute copyrighted works
such as "art" (e.g., Thomas Kincaid's painting "Dawn in Los Gatos") and characters (e.g.,
Mickey Mouse). With such license, a licensee need not fear a claim of copyright
infringement brought by the copyright owner.

Artistic license is, however, not related to the aforementioned license. It is a euphemism
that denotes approaches in art works where dramatic effect is achieved at the expense of
factual accuracy.

LICENSE
Academy

National examples of the License are listed at Licentiate

A license is an academic degree. Originally, in order to teach at a university, one needed

this degree which, according to its title, gave the bearer a license to teach. The name
survived despite the fact that nowadays doctorate is typically needed in order to teach at a
university. A person who holds a license is called a licentiate.

Franchising

A typical McDonald’s franchise.

Franchising refers to the methods of practicing and using another person's business
philosophy. The franchisor grants the independent operator the right to distribute its
products, techniques, and trademarks for a percentage of gross monthly sales and a
royalty fee. Various tangibles and intangibles such as national or international
advertising, training, and other support services are commonly made available by the
franchisor. Agreements typically last from five to thirty years, with premature
cancellations or terminations of most contracts bearing serious consequences for
franchisees.

Franchising has been around for many centuries but did not come to prominence until the
1930s, when the establishment of electricity, vehicles, and, in the 1950s, the Interstate
Highway system helped propel modern franchising, most notably franchise-based food
service establishments. According to the International Franchise Association
approximately 4% of all businesses in the United States are franchises, with the majority
being McDonalds franchises.

Overview
The term "franchise" is used to describe business systems which may or may not fall into
the legal definition provided above. For example, a vending machine operator may
receive a franchise for a particular kind of vending machine, including a trademark and a
royalty, but no method of doing business. This is called "product franchising" or "trade
name franchising".

Cancellations or terminations of franchise agreements before the completion of the

contract have serious consequences for franchisees. Franchise agreement terms typically
result in a loss of the sunk costs of the first-owner franchisees who build out the branded
physical units and who lease the branded name, marks, and business plan from the
franchisors if the franchise is canceled or terminated for any reason before the expiration
of the entire term of the contract. (Item 15 of the Rule of the Federal Trade Commission
requires disclosure of terms that cover termination of the franchise agreement and the
terms substantiate this statement)

Businesses for which franchising works best

Businesses for which franchising is said to work best have the following characteristics:

• Businesses with a good track record of profitability.

• Businesses built around a unique or unusual concept.
• Businesses with broad geographic appeal.
• Businesses which are relatively easy to operate.
• Businesses which are relatively inexpensive to operate.
• Businesses which are easily

Legal considerations

The franchisor is relieved of many of the mundane duties necessary to start a new outlet,
such as obtaining the necessary licenses and permits. In some jurisdictions, certain
permits (especially alcohol licenses) are more easily obtained by locally based, owner-
operator type applicants while companies based outside the jurisdiction (and especially if
they originate in another country) find it difficult if not impossible to get such licences
issued to them directly. For this reason, hotel and restaurant chains that sell alcohol often
have no viable option but to franchise if they wish to expand to another state or province.

Additionally, the franchisor is relieved of the obligation to carry liability insurance on the
independently owned franchise units that produce the gross sales of the franchised system
because this is the obligation and responsibility of the franchisees under the franchise
agreement. As long as the franchisor's operational manuals are efficient and followed by
the franchisees, the franchisors are generally almost always protected from any liability
for any incident that occurs on the property of the franchisee.

Franchisors can sell franchises without making any representations as to success or

failure of the units in the written franchise disclosure documents and in the written
franchise agreements. Therefore, franchisors are generally protected from lawsuits from
their franchiseebecause of the non-negotiable contracts that require franchisees to
acknowledge, in effect, that they are buying the franchise knowing that there is risk, and
that they have not been promised success or profits by the franchisor.

Operational considerations

Franchisees are said to have a greater incentive than direct employees to operate their
businesses successfully because they have a direct stake in the start up of the branded
business and the tangible assets that wear the brand name. The need of franchisors to
closely scrutinize the day to day operations of franchisees (compared to directly-owned
outlets) is greatly reduced.

Franchisors can maximize their profits on the gross sales of the franchisees and avoid the
operational expenses for the physical units that wear their brand names. Franchisors can
minimize their risk and thus increase their profits because their franchisees bear the
expense of operating the units and the expense of being employers, in compliance with
existing city, state, and federal laws. a

ADVANTAGE

For franchisees

Employment

Opening a franchise is a way of owning a business.

Quick start

As practiced in retailing, franchising offers franchisees the advantage of starting up a new

business quickly based on a proven trademark and formula of doing business, as opposed
to having to build a new business and brand from scratch (often in the face of aggressive
competition from franchise operators). A well run franchise would offer a turnkey
business: from site selection to lease negotiation, training, mentoring and ongoing
support as well as statutory requirements and troubleshooting.

Expansion

With the help of the expertise provided by the franchisors, the franchisees may be able to
take their franchised businesses to a level which they wouldn't have been able to without
the expert guidance of their franchisors.

Training

Franchisors often offer franchisees significant training, which is not available for free to
individuals starting their own business. Although training is not always free for
franchisees, it is sometimes supported through the traditional franchise fee that the
franchisor collects and tailored to the business that is being started. When training fees
and travel expenses, etc.. are required beyond the initial franchise fee, these fees are
deductible as part of the startup expenses of the business.

Many franchisors nowadays also have an online Corporate University to help franchisees
with both initial and ongoing trainingAn online Corporate University has the advantage
of enabling anytime, anywhere learning and is generally made available free of charge to
the franchisee.

DISADVANTAGE

For franchisors

Limited pool of viable franchisees

In any city or region there may be only a limited pool of prospects who have both the
financial resources and the desire to purchase and start up a franchised business, as
compared to the pool of individuals who can be hired and trained to competently manage
directly-owned businesses, as paid employees. However, in periods of recession where
traditional good jobs are in short supply, this disadvantage disappears because those who
can't find good jobs are willing to invest money in a franchise as a means of self-
employment.

Control

Successful franchising necessitates a much more careful vetting process when evaluating
the limited number of potential franchisees than would be required in the hiring of direct
employees who may have experience in the concept sector. An incompetent manager of a
directly-owned outlet can easily be replaced, while, regardless of the local laws and
agreements in place, removing an incompetent franchisee who owns the tangible assets of
the business is much more difficult. Incompetent franchisees can easily damage the
public's goodwill towards the franchisor's brand by providing inferior goods and services.
If a franchisee is cited for legal violations, (s)he will probably face the legal
consequences alone but the franchisor's reputation could still be damaged.

No guarantee

Usually, there is no guarantee of financial success for the franchisee made by the
franchisor in the written disclosure circular and the actual franchise agreement. While the
estimated startup costs of the franchise are an implied "earnings claim" some businesses
do fail, including franchised outlets. Unfortunately, the unit financial performance
statistics are not required to be disclosed to new buyers of franchises under Federal
Regulatory Policy, the FTC Rule, and this omission makes it impossible for new buyers
of franchises to assess the odds of success and failure of their investment in the franchise
in terms of profitability and failure as experienced on a unit basis of the franchise system.
(See article in American Business Law Journal, 1 January 2003, entitled Franchising
Fraud: the continuing need for reform, 1 January 2003, published on the Internet in mid
2008.)

Control

For franchisees, the main disadvantage of franchising is a loss of control. While they gain
the use of a system, trademarks, assistance, training, marketing, the franchisee is required
to follow the system and get approval for changes from the franchisor. For these reasons,
franchisees and entrepreneurs are very different. The United States Office of Advocacy
of the SBA indicates that a franchisee "is merely a temporary business investment where
he may be one of several investors during the lifetime of the franchise. In other words, he
is "renting or leasing" the opportunity, not "buying a business for the purpose of true
ownership." Additionally, "A franchise purchase consists of both intrinsic value and time
value. A franchise is a wasting asset due to the finite term: the franchisor is only obliged
to renew the franchise if it chooses to contract for that obligation."

Price

Starting and operating a franchise business carries expenses. In choosing to adopt the
standards set by the franchisor, the franchisee often has no further choice as to signage,
shop fitting, uniforms etc. The franchisee may not be allowed to source less expensive
alternatives. Added to that is the franchise fee and ongoing royalties and advertising
contributions. The contract may also bind the franchisee to such alterations as demanded
by the franchisor from time to time. (As required to be disclosed in the state disclosure
document and the franchise agreement under the FTC Franchise Rule)
Conflicts

The franchisor/franchisee relationship can easily cause conflict if either side is

incompetent (or acting in bad faith). An incompetent franchisor can destroy its
franchisees by failing to promote the brand properly or by squeezing them too
aggressively for profits. Franchise agreements are unilateral contracts or contracts of
adhesion wherein the contract terms generally are advantageous to the franchisor when
there is conflict in the relationship. Additionally, the legal publishing website Nolo.com
listed the "Lack of Legal Recourse" as one of Ten Good Reasons Not to Buy a Franchise:

Social franchises

In recent years, the idea of franchising has been picked up by the social enterprise sector,
which hopes to simplify and expedite the process of setting up new businesses. A number
of business ideas, such as soap making, wholefood retailing, aquarium maintenance, and
hotel operation, have been identified as suitable for adoption by social firms employing
disabled and disadvantaged people.

The most successful example is probably the CAP Markets, a steadily growing chain of
some 50 neighborhood supermarkets in Germany. Other examples are the St. Mary's
Place Hotel in Edinburgh and the Hotel Tritone in Trieste.

Social franchising also refers to a technique used by governments and aid donors to
provide essential clinical health services in the developing world.

Event franchising

Event franchising is the duplication of public events in other geographical areas, while
retaining the original brand (logo), mission, concept and format of the event. As in classic
franchising, event franchising is built on precisely copying successful events. Good
example of event franchising is the World Economic Forum, or just Davos forum which
has regional event franchisees in China, Latin America etc. Likewise, the alter-globalist
World Social Forum has launched many national events