In recent articles, I’ve shared with you two effective ways to grow your business on the Internet (sampling and endorsed reciprocal promotions). A third strategy to consider is licensing agreements.
Selling licenses for your products and business systems to other businesses can be a profitable method for growing your company without additional labor costs. Your licensees may pay an initial licensing fee in addition to ongoing royalties on sales made.
If you’re licensing a business system you own, it’s important to comply with applicable business opportunity rules and regulations. Your Internet business attorney can answer any questions you have about these limitations.
Related Article – 7 Keys To Picking The Right Internet Lawyer For Your Business
In addition, you’ll want to avoid setting up the licensing arrangement in such a way as it could be construed by the government as a franchise.
Why licensing agreements instead of franchises?
Franchising is a heavily regulated method of doing business because of a long history of franchisor abuse of franchisees. When you’re a franchisor, you’re under heavy scrutiny from federal and state agencies looking to protect both franchisees and their consumers.
Related Article: Licensing Agreements – How To License Products In 3 Easy Steps
Licensing agreements properly drafted by a qualified business lawyer will ensure that you get what you want from the deal while protecting your intellectual property rights in the process.