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Definition

Licensing or franchising

Licensing or franchising which are similar approaches involving one organization giving another organization the right to use its brand name, technology, or product specifications in return for a lump-sum payment or a fee (usually based on sales).

 The only difference is that licensing is primarily used by manufacturing organizations that make or sell another company’s products, and franchising is primarily used by service organizations that want to use another company’s name and operating methods.

Licensing is an agreement in which an organization gives another organization the right to make or sell its products, using its technology or product specifications.

Franchising is an agreement in which an organization gives another organization the right to use its name and operating methods.

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