A license agreement is a contract in which one party grants another party permission to do something that would otherwise be illegal. These types of licenses are common for intellectual property protected by copyright, patent, or trademark. It can include a proprietary way of doing business, such as real estate investing or even operating a yoga studio.

Licensing agreements are more flexible than franchises because they are not heavily regulated by the government, are more flexible, and are less expensive to create and control than a franchise. Licenses promote entrepreneurs instead of suffocating them with a one-size-fits-all method of doing business one finds with franchises.

There are two primary ways to grow your business through licensing: (1) find others who are willing to pay licensing fees for what you own and make money by replicating your business through these licensees; and (2) become a licensee for the rights to something that would be profitable for your business to use.

If you’ve invented the wheel, license it and make money. If you haven’t, don’t reinvent it. License it from the inventor.

About the Author

With an advanced international law degree from Georgetown University and more than 14 years of real world legal experience, Attorney Mike Young shows entrepreneurs how to protect and grow their businesses online. He's the author of Internet Marketing Legal Secrets Revealed. Not just a lawyer who focuses exclusively on Internet and marketing law, Mike’s been working with computers for more than 27 years (his first computer was an Atari 400 with 8 KiB RAM) and started representing Internet businesses back in 1996.