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.

These types of agreements are commonly used in business for employment contracts, independent contractor agreements, and when entering into negotiations to buy or sell a business…and even for joint ventures, franchising, and licensing deals.

A confidentiality agreement will not prevent a dishonest person from disclosing information. However, a properly drafted agreement can encourage the person who signs it to do the right thing and provide for damages if the information is leaked.