Franchising and Licensing

"There are three critical components of the franchise system: (1) the brand, (2) the operating system, and (3) the ongoing support provided by the franchisor to the franchisee."

"Franchisors must view franchising as the establishment of a series of long-term relationships, and the ongoing success of the company as a franchisor depends on the harmony of these relationships."

"A well-designed training program seeks to educate (rather than dictate) franchisees on how to build a successful business."

"The glue holding the typical franchise system together consists of the uniform policies, procedures, and specifications that must be followed by all franchisees."

"There are four major types of state definitions of a franchise or business opportunity."

"Will you require franchisees to contribute to a regional or national advertising fund?"

"In all likelihood, the compliance staff will be pitted against the sales and marketing staff, with ongoing conflict and tension between the need to market aggressively and the need to market legally."

"A well-drafted franchise agreement reflects the culmination of literally thousands of business decisions and hundreds of hours of strategic planning, market research, and customer testing."

"The intellectual property of a franchise system consists primarily of (1) trademarks and service marks, (2) trade secrets, (3) copyrights, (4) and trade dress."

"There is a broad range of methods and procedures available that generally expedite the resolution of disputes without the need for litigation, broadly referred to as alternative dispute resolutions."

"The days of the fast-talking, leisure-suited, blue-suede-shoe franchise salesman are long gone."

"Unlike international copyright laws, your properly registered domestic trademark does not automatically confer any trademark rights in other countries."

"A growing franchisor must be prepared to educate the source of capital as to the unique aspects of financing a franchise company."

"Any time that the CFO needs to put pressure on the marketing staff to "close a deal so we can pay rent this month," cash flow is being mismanaged."

"Certain key issues, such as royalty rates, performance standards, territorial allocations, and advertising fund contributions, may need to be revisited."

"Many growing product-oriented companies choose to bring their wares to the marketplace through independent third-party distributors and dealerships."

"From a legal perspective, licensing involves complex issues of contract, tax, antitrust, international, tort, and intellectual property law."

"The key to successful brand extension is that the brand itself must stand for something greater than the original product and that the consumer's perception of the extended brand is a natural one."

"What are each prospective partner's previous experiences and track record with other joint venture relationships? Why did these previous relationships succeed or fail?"

"Since the idea behind co-branding is to create a product carrying two brands, it will result in double recognition, double endorsement power, and double consumer confidence."