When it comes to expanding a business, whats the difference between franchising and licensing?
It boils down to semantics in the final analysis. When you put someone into business, which is done in franchising, the government will regulate that activity. The two regulatory frameworks that cover these situations 99% of the time are either the franchise laws or the business opportunity laws. It doesn’t matter that you call the relationship a “license” or a “joint venture” or whatever. All that matters is the presence (or absence) of a very limited number of common elements. Both require preparing, and in many states filing, significant paperwork and documents with the appropriate regulatory agency before any advertising takes place. There’s the federal FTC Rule that applies in all states to franchises and business opportunities. In California, there’s also the CFIL (Calfornia Franchise Investment Law) for franchises and the Seller Assisted Marketing Plan (SAMP) for business opportunities. There’s a good article about franchising vs. licensing and business opportunity ventures on t
