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79-674: A licensed trust deed investment company (TDIC) offers investments in collateral -backed property loans in the United States . Unlike private individuals who are generally subject to usury laws limiting interest rates on loans, TDICs can legally lend to property owners at rates determined by market demand. Because TDICs usually lend to borrowers with needs banks cannot accommodate (e.g., fast turnaround, multiple-use real estate projects), market rates for trust deed investments are usually significantly higher than bank mortgage rates. TDICs originate, underwrite, fund and service

158-448: A franchise disclosure document (FDD), no laws require an estimate of franchisee profitability, which depends on how intensively the franchisee "works" the franchise. Therefore, franchisor fees are typically based on "gross revenue from sales" and not on profits realized. See remuneration . Various tangibles and intangibles such as national or international advertising , training and other support services are commonly made available by

237-403: A lease or other contract). The simplest definition is "A license is a promise not to sue", because a license usually either permits the licensed party to engage in an illegal activity, and subject to prosecution, without the license (e.g. fishing , driving an automobile , or operating a broadcast radio or television station ), or it permits the licensed party to do something that would violate

316-418: A term , territory , renewal provisions, and other limitations deemed vital to the licensor. Term: many licenses are valid for a particular length of time. This protects the licensor should the value of the license increase, or market conditions change. It also preserves enforceability by ensuring that no license extends beyond the term of the agreement. Territory: a license may stipulate what territory

395-514: A "drug cooperative". As he explained to them, they could increase profits by paying less for their purchases, especially if they set up their own manufacturing company. His idea was to market private label products. About 40 druggists pooled $ 4,000 of their own money and adopted the name Rexall . Sales soared, and Rexall became a franchisor. The chain's success set a pattern for other franchisors to follow. Although many business owners did affiliate with cooperative ventures of one type or another, there

474-655: A computer. Typically, a license is associated with a unique code, that when approved grants the end user access to the software in question. Under a typical end-user license agreement, the user may install the software on a limited number of computers. The enforceability of end-user license agreements is sometimes questioned . As of 2020, there are various ways to license software with different kinds of licensing models, which allow software vendors to profit from their product offerings in flexible ways. Like other intellectual property, patent owners may grant permission to others to engage in conduct that would otherwise be within

553-438: A customer who had a bad experience at one franchise may assume that they will have the same experience at other locations with other services. Distance can make it difficult for firms to detect whether or not the franchises are of poor quality. One way around this disadvantage is to set up extra subsidiaries in each country or state in which the firm expands. This creates a smaller number of franchisees to oversee, which will reduce

632-416: A fair price from the franchisor or sources recommended by the franchisor. A coffee brew, for example, can be readily identified by the trademark if its raw materials come from a particular supplier. If the franchisor requires purchase from her stores, it may come under anti-trust legislation or equivalent laws of other countries. So, too, with purchases such as the uniforms of personnel and signs, as well as

711-399: A foreign market on its own, as the franchisee is typically responsible for those costs and risks, putting the onus on them to build a profitable operation as quickly as possible. Through franchising, a firm has the potential of building a global presence quickly and also at a low cost and risk. For the franchisee, the primary advantages are access to a well-known brand, support in setting up

790-520: A former master franchisee of the country's largest franchise system led to a review of the need for franchise law by the Ministry of Economic Development. The New Zealand Government decided there was no case for franchise-specific legislation at that time. This decision was criticised by the opposition, which had initiated the review when in power, and the review process was questioned by a leading academic. The Franchise Association originally supported

869-450: A franchisor: (a) a royalty for the trademark, (b) reimbursement for the training and advisory services given to the franchisee, and (c) a percentage of the individual business unit's sales. These three fees may be combined in a single 'management' fee. A fee for "disclosure" is separate and is always a "front-end fee". A franchise usually lasts for a fixed time period (broken down into shorter periods, which each require renewal), and serves

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948-462: A great extent. Consequently, franchising was not a growth industry in the United States. It was not until the 1960s and 1970s that people began to take a close look at the attractiveness of franchising. The concept intrigued people with entrepreneurial spirit. However, there were serious pitfalls for investors, which almost ended the practice before it became truly popular. The United States

1027-401: A large sports stadium) in which prospective franchisors must then compete to exclude one another from. However, under specific circumstances like transparency, favourable legal conditions, financial means and proper market research, franchising can be a vehicle of success for both a large franchisor and a small franchisee. Thirty-six countries have laws that explicitly regulate franchising, with

1106-405: A license does not require consideration, a license can be created with or without it. Moreover, whether an agreement is held to be a "license" and not a lease will depend on three essential characteristics of a license: (1) a clause allowing the licensor to revoke "at will"; (2) the retention by the licensor of absolute control over the premises; and (3) the licensor's supplying to the licensee all of

1185-404: A particular geographic region, just for a certain period of time or merely for a stage in the value chain . Moreover, there are different types of fees within the trademark and brand licensing. The first form demands a fee independent of sales and profits , the second type of license fee is dependent on the productivity of the licensee. For example, McDonald's licenses their trademark such as

1264-402: A percentage of the money they collected and turned the rest over. The practice ended around 1562 but spread to other endeavors. For example, in 17th-century England franchisees were granted the right to sponsor markets and fairs or operate ferries . There was little growth in franchising, though, until the mid-19th century, when it appeared in the United States for the first time. One of

1343-476: A permission to a licensee to copy and distribute copyrighted works such as "art" (e.g., Thomas Kinkade 's painting Dawn in Los Gato ) and characters (e.g., Mickey Mouse ). With such license, a licensee need not fear a claim of copyright infringement brought by the copyright owner. Artistic license is, however, not related to the aforementioned license. It is a euphemism that denotes freedom of expression,

1422-589: A person who holds a licentiate. In English, the degree has never been called a license. In France, the licence is the first degree awarded in Universities. In Sweden , Finland, and in some other European university systems, a 'licentiate' is a postgraduate degree between the master's degree and the doctorate. The licentiate is a popular choice in those countries where a full doctoral degree would take five or more years to achieve. A license to driving certain vehicles has been applied to many countries around

1501-478: A probation officer and only living at an approved address, in exchange for their early release. If they break the conditions of the licence, they can be "recalled" (returned to prison). Offenders serving determinate sentences are released automatically at a set point in their sentence, whereas prisoners serving indeterminate sentences (e.g. life imprisonment ) can only be released by the parole board . Patent licensing has been studied in formal economic models in

1580-551: A sales revenue of approximately $ 66.5 billion. In 2016 the majority of franchise brands were retailers with the largest segment being non-food retailing, accounting for 26 percent of brands, a further 19 percent of brands were involved in food retailing, 15 percent of franchisors operated in administration and support services, 10 percent in other services, 7 percent in education and training and 7 percent in rental, hire and real estate services. Franchising in Australia commenced in

1659-412: A significant way in the early 1970s under the influence of the franchised US fast food systems such as KFC , Pizza Hut , and McDonald's . It was however underway prior to this and a decade earlier in 1960 Leslie Joseph Hooker , considered a pioneer of franchising, created Australia's first national real estate agency network of Hooker real estate agencies. In Australia, franchising is regulated by

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1738-413: A specific territory or geographical area surrounding its location. One franchisee may manage several such locations. Agreements typically last from five to thirty years, with premature cancellations or terminations of most contracts bearing serious consequences for franchisees. A franchise is merely a temporary business investment involving renting or leasing an opportunity, not the purchase of a business for

1817-503: A state's governing real estate, lending or corporation authority, or some combination. The private money loans provided by TDICs are also known as hard money loans —a reference to the hard assets that provide collateral for the loans. Hard money loans are usually short-term, bridge loans designed to meet temporary cash needs for projects that will eventually be refinanced with conventional bank loans. License A license ( American English ) or licence ( Commonwealth English )

1896-416: A type of activity, and to allow them to set conditions and limitations. A licensor may grant a license under intellectual property laws to authorize a use (such as copying software or using a patented invention) to a licensee, sparing the licensee from a claim of infringement brought by the licensor. A license under intellectual property commonly has several components beyond the grant itself, including

1975-636: Is a leader in franchising, a position it has held since the 1930s when it used the approach for fast-food restaurants, food inns and, slightly later, motels at the time of the Great Depression . As of 2005, there were 909,253 established franchised businesses, generating $ 880.9 billion of output and accounting for 8.1 percent of all private, non-farm jobs. This amounts to 11 million jobs, and 4.4 percent of all private sector output. Mid-sized franchises like restaurants, gasoline stations and trucking stations involve substantial investment and require all

2054-431: Is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another party (licensee) as an element of an agreement between those parties. In the case of a license issued by a government, the license is obtained by applying for it. In the case of a private party, it is by a specific agreement, usually in writing (such as

2133-437: Is entered into. The code also regulates the content of franchise agreements, for example in relation to marketing funds, a cooling-off period , termination, and the resolution of disputes by mediation . On 1 January 2015, the old Franchising Code was repealed and replaced with a new Franchising Code of Conduct. The new Code applies to conduct on or after 1 January 2015. The new Code: These are significant changes and it

2212-616: Is important that franchisors, franchisees and potential franchises understand their rights and responsibilities under the Code. For further information about the changes to the Code, please see the updated Franchisor Compliance Manual and the Franchisee Manual. The Code explanatory materials are available from the ComLaw website (link is external). New Zealand is served by around 423 franchise systems operating 450 brands, giving it

2291-459: Is necessary to complete the act. Another key distinction between a license and a lease is that leases are generally required to be in writing, where the statute of frauds requires it, while licenses can be made orally. A license is generally created by an express or implied agreement. The licensor must agree to the license which can be shown in writing or the licensors acquiescence in its exercise. Furthermore, unlike many other contractual agreements,

2370-437: Is necessary to operate complicated equipment, and the franchisee has to learn on their own from instruction manuals. The training period must be adequate, but in low-cost franchises it may be considered expensive. Many franchisors have set up corporate universities to train staff online. This is in addition to providing literature, sales documents and email access. Also, franchise agreements carry no guarantees or warranties and

2449-467: Is of Anglo-French derivation—from franc , meaning 'free'—and is used both as a noun and as a (transitive) verb. For the franchisor, use of a franchise system is an alternative business growth strategy, compared to expansion through corporate owned outlets or " chain stores ". Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the franchisor's capital investment and liability risk. Franchising

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2528-457: Is rarely an equal partnership, especially in the typical arrangement where the franchisee is an individual, unincorporated partnership or small privately held corporation, as this will ensure the franchisor has substantial legal and/or economic advantages over the franchisee. The usual exception to this rule is when the prospective franchisee is also a powerful corporate entity controlling a highly lucrative location and/or captive market (for example,

2607-475: Is statutorily required prior to the commencement of any special proceeding to recover possession of the property (e.g., in NY that requirement is 10 days). Mass distributed software is used by individuals on personal computers under license from the developer of that software. Such license is typically included in a more extensive end-user license agreement (EULA) entered into upon the installation of that software on

2686-402: The " Golden Arches " or the " Big Mac ", but the licenses gives McDonald's a right to impose strict quality standards to their franchisees as they can take back the right to the trademark if they do not meet McDonald's standards. When a licensor grants permission to a licensee to not only distribute, but manufacture a patented product, it is known as licensed production . A licensor may grant

2765-413: The "territory" if the franchise is worked according to plan. The franchisee must be seen as an independent merchant. It must be protected by the franchisor from any trademark infringement by third parties. A franchise attorney is required to assist the franchisee during negotiations. Often the training period – the costs of which are in great part covered by the initial fee – is too short in cases where it

2844-739: The English language for the document, as long as the Brazilian party knows English fluently and expressly acknowledges that fact, to avoid translation. The registration accomplishes three things: In Canada, recent legislation has mandated better disclosure and fair treatment of franchisees. The regulations also ensure their right to form associations and launch collective action, even if they signed contracts prohibiting such moves. Franchising in Canada involves 1,300 brands, 80,000 franchise units accounting for about 20% of all consumer spending . China has

2923-550: The Franchising Code of Conduct, a mandatory code of conduct concluded under the Trade Practices Act 1974 . The ACCC regulates the Franchising Code of Conduct, which is a mandatory industry code that applies to the parties to a franchise agreement. This code requires franchisors to produce a disclosure document which must be given to a prospective franchisee at least 14 days before the franchise agreement

3002-461: The Singer venture did not put an end to franchising. Other companies attempted franchising in one form or another after the Singer experience. For example, several decades later, General Motors established a somewhat successful franchising operation in order to raise capital. Perhaps the father of modern franchising, though, is Louis K. Liggett . In 1902, Liggett invited a group of druggists to join

3081-419: The United States. The Singer Company implemented a franchising plan in the 1850s to distribute its sewing machines. The operation failed, though, because the company did not earn much money even though the machines sold well. The dealers, who had exclusive rights to their territories, absorbed most of the profits because of deep discounts. Some failed to push Singer products, so competitors were able to outsell

3160-399: The ability to make the subject appear more engaging or attractive, by fictionalizing part of the subject. A licentiate is an academic degree that traditionally conferred the license to teach at a university or to practice a particular profession. The term survived despite the fact that nowadays a doctorate is typically needed in order to teach at a university. The term is also used for

3239-587: The agreement, which leads to refunds and serious payments for damages. The Franchise Law does not distinguish between Brazilian and foreign franchisors. The National Institute of Industrial Property (INPI) is the registering authority. Indispensable documents are a Statement of Delivery (of disclosure documentation) and a Certification of Recording (INPI). The latter is necessary for payments. All sums may not be convertible into foreign currency. Certification may also mean compliance with Brazil's antitrust legislation. Parties to international franchising may decide to adopt

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3318-459: The attention of a businessperson. There are also large franchises like hotels, spas and hospitals, which are discussed further under technological alliances . "No poaching" agreements are prevalent within franchises, thus limiting the ability of employers at one franchise establishment to hire employees at an affiliated franchise. Economists have characterized these agreements as a contributor to oligopsony . Three important payments are made to

3397-405: The authority to act on another's land, when such action would typically amount to trespass absent that license. A key distinction between licenses and leases is that a license grants the licensee a revocable non-assignable privilege to act upon the land of the licensor, without granting any possessory interest in the land. Once a license is agreed upon, the licensee may occupy the land only so far as

3476-470: The business using operating manuals, and ongoing operational support including access to suppliers and employee training. A primary disadvantage to franchising is quality control, as the franchisor wants the firm's brand name to convey a message to consumers about the quality and consistency of the firm's product. They want the consumer to experience the same quality regardless of location or franchise status. This can prove to be an issue with franchising, as

3555-464: The company. Under the existing contract, Singer could neither withdraw rights granted to franchisees nor send in its own salaried representatives. So, the company started repurchasing the rights it had sold. The experiment proved to be a failure. That may have been one of the first times a franchisor failed, but it was by no means the last. Colonel Harland Sanders did not initially succeed in his early efforts at franchising Kentucky Fried Chicken . Still,

3634-414: The current establishment of wealthy occupants that they decrease the supply of such occupations, which raises prices for the average consumer. Libertarians and the anti-authoritarian left ( anarcho-communists ) view competing guilds and other voluntary communes as being more beneficial for disseminating the skills and education required to perform a specified career. Franchising The word franchise

3713-486: The death of either the licensee or licensor will terminate the agreement. If a license is revocable at will by the licensor, courts will be unable to grant specific performance in favor of the licensee. A licensee would be unsuccessful in bringing forcible entry claims or a detainer proceeding because the licensee was never granted any possessory interest. The Licensee would also not be able to recover damages for money spent unless they are able to show detrimental reliance on

3792-428: The essential services required for the licensee's permitted use of the premises. Under a pure licensing agreement, the licensor, under its terms and by common-law, can cancel the agreement at will and without cause, unless it is coupled with an interest or made irrevocable by contract. A license that has been coupled with an interest is not revocable by the licensor without exposure to liability and potential damages. In

3871-400: The event a license is coupled with an interest, the licensor must provide reasonable time for the licensee to remove that interest from the property prior to termination. Additionally, because a license does not confer any possessory interest in the licensee, in the event of a sale of the property, the license is terminated and cannot be enforced against the new owners of that property. Moreover,

3950-432: The field of industrial organization . In particular, Katz and Shapiro (1986) have explored the optimal licensing strategy of a research lab selling to firms who are competitors on the product market. It turns out that (compared to the welfare-maximizing solution) the licensor's incentives to develop innovations may be excessive, while the licensor's incentives to disseminate the innovation are typically too low. Subsequently,

4029-415: The field of industrial electronics). Often, patent owners will require a licensee to pay money in exchange for granting a patent license. Such payments are referred to as royalty payments and come primarily in two forms: lump sum or running royalty. A lump sum royalty involves an upfront, one-time payment, while a running royalty typically involves periodic payments ( e.g., quarterly or annual) based on

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4108-412: The first successful American franchising operations was started by an enterprising druggist named John S. Pemberton . In 1886, he concocted a beverage comprising sugar , molasses , spices , and cocaine . Pemberton licensed selected people to bottle and sell the drink, which was an early version of what is now known as Coca-Cola . His was one of the earliest—and most successful—franchising operations in

4187-414: The franchise as a system in which the franchisor licenses the franchisee, for a payment, the right to use a trademark or patent along with the right to distribute products or services on an exclusive or semi-exclusive basis. The provision of a "Franchise Offer Circular", or disclosure document, is mandatory before execution of agreement and is valid for all of the Brazilian territory. Failure to disclose voids

4266-416: The franchise sites, if they are owned or controlled by the franchisor. The franchisee must carefully negotiate the license and must develop a marketing or business plan with the franchisor. The fees must be fully disclosed and there should not be any hidden fees. The start-up costs and working capital must be known before the license is granted. There must be assurance that additional licensees will not crowd

4345-443: The franchisee has little or no recourse to legal intervention in the event of a dispute. Franchise contracts tend to be unilateral and favor of the franchisor, who is generally protected from lawsuits from their franchisees because of the non-negotiable contracts that franchisees are required to acknowledge, in effect, that they are buying the franchise knowing that there is risk, and that they have not been promised success or profits by

4424-416: The franchising authority are becoming increasingly strict. Some franchisors are using minor rule violations to terminate contracts and seize the franchise without any reimbursement. Franchising brings with it several advantages and disadvantages for firms looking to expand into new areas and foreign markets. The primary advantage is that the firm does not have to bear the development cost and risks of opening

4503-443: The franchisor's signs, logos and trademark in a prominent place. The uniforms worn by the staff of the franchisee have to be of a particular design and color. The service has to be in accordance with the pattern followed by the franchisor in the successful franchise operations. Thus, franchisees are not in full control of the business, as they would be in retailing. A service can be successful if equipment and supplies are purchased at

4582-521: The franchisor. Franchise brokers help franchisors find appropriate franchisees. There are also main 'master franchisors' who obtain the rights to sub-franchise in a territory. According to the International Franchise Association approximately 44% of all businesses in the United States are franchisee-worked. Franchising is one of the few means available to access venture capital without the need to give up control of

4661-416: The franchisor. Contracts are renewable at the sole option of the franchisor. Most franchisors require franchisees to sign agreements that mandate where and under what law any dispute would be litigated. In 2016 there were an estimated 1,120 franchise brands operating in Australia and an estimated 79,000 units operating in business format franchises, with a total brand turnover of approximately $ 146 billion and

4740-478: The highest proportion of franchises per capita in the world. Despite (or because of) the 2008–2009 recession, the total number of franchised units increased by 5.3% from 2009 to 2010. There is no separate law covering franchises, so they are covered by normal commercial law. This functions very well in New Zealand and includes law as it applies to contracts, restrictive trade practices, intellectual property, and

4819-499: The law of misleading or deceptive conduct. The Franchise Association of New Zealand introduced a self-regulatory code of practice for its members in 1996. This contains many provisions similar to those of the Australian Franchising Code of Practice legislation, although only around a third of all franchises are members of the association and therefore bound by the code. A case of fraud in 2007 perpetrated by

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4898-433: The legal system, be stopped if the intellectual property owner wanted to do so. Intellectual property licensing plays a major role in business, academia and broadcasting. Business practices such as franchising , technology transfer , publication and character merchandising entirely depend on the licensing of intellectual property. Land licensing (proprietary licensing) and IP licensing. A license provides one party with

4977-415: The license. In certain cases, however, licenses can be made irrevocable, and specific performance may be granted. Where a license is made with a set term period and valid consideration is transferred, revocation of the license prior to the terms expiration may raise breach of contract claims that could provide damages against the licensor. Furthermore, once the licensor terminates or revokes the license, notice

5056-432: The licensee is the only person or entity that is allowed to sell, make, use, offer to sell, or import the patented invention) or non-exclusive ( i.e., the licensee is simply one of several entities who has rights under the patent). Finally, any rights given under the agreement may be limited to a particular "field of use" ( e.g., a licensee may be able to practice an invention in the field of consumer electronics, but not in

5135-603: The loans for individual and/or group investors. Trust deed investors receive regular interest payments throughout the loan term and principal is repaid when the loan matures. In the event of default, TDICs generally manage workouts and, where necessary, foreclosure , on behalf of investors. Some TDICs have in-house real estate brokers who can re-sell REO in the event of foreclosure. Others may also have property management staff who can rent foreclosed properties on behalf of investors. Licensing requirements for TDICs vary from state to state. Generally, TDIC activities are overseen by

5214-458: The majority of all other countries having laws which have a direct or indirect effect on franchising. Franchising is also used as a foreign market entry mode . The boom in franchising did not take place until after World War II . Nevertheless, the rudiments of modern franchising date back to the Middle Ages when landowners made franchise-like agreements with tax collectors , who retained

5293-465: The most franchises in the world but the scale of their operations is relatively small. The average franchise system in China has about 45 outlets, compared to more than 540 in the United States. Together, there are 2600 brands in some 200,000 retail markets . KFC was the most significant foreign entry in 1987 and is widespread. Many franchises are in fact joint-ventures, as at their forming the franchise law

5372-404: The number of patented products sold or imported. A licensor may grant permission to a licensee to distribute products under a trademark . With such a license, the licensee may use the trademark without fear of a claim of trademark infringement by the licensor. The assignment of a license often depends on specific contractual terms . The most common terms are, that a license is only applicable for

5451-514: The operation of the chain and build a distribution system for servicing it. After the brand and formula are carefully designed and properly executed, franchisors are able to sell franchises and expand rapidly across countries and continents using the capital and resources of their franchisees while reducing their own risk. There is also risk for the people buying the franchises. However, failure rates are much lower for franchise businesses than independent business startups. Franchisor rules imposed by

5530-493: The optimal number of licenses in a signalling model. The provision of licenses and the agencies that mandate them are often criticised by American libertarians like Milton Friedman for creating an anticompetitive environment for occupations, which creates a barrier to entry for more qualified and skilled individuals who may not have the resources to obtain the necessary licences. According to Friedman, licenses and permits have become so burdensome due to legislation that favors

5609-530: The positive regulation of the franchise sector but its eventual submission to the review was in favour of the status quo of self-regulation. By the end of 2012, about 2,031 franchise brands were operating in Brazil, with approximately 93,000 locations, making it one of the largest countries in the world in terms of number of units. Around 11 percent of this total were foreign-based franchisors. The Brazilian Franchise Law (Law No. 8955 of December 15, 1994) defines

5688-535: The purpose of ownership. It is classified as a wasting asset due to the finite term of the license. Franchise fees are on average 6.7% with an additional average marketing fee of 2%. However, not all franchise opportunities are the same and many franchise organizations are pioneering new models that challenge antiquated structures and redefine success for the organization as well as the franchisee. A franchise can be exclusive, non-exclusive or "sole and exclusive". Although franchisor revenues and profit may be listed in

5767-419: The quality control challenges. Each party to a franchise has several interests to protect. The franchisor is involved in securing protection for the trademark, controlling the business concept and securing know-how . The franchisee is obligated to carry out the services for which the trademark has been made prominent or famous. There is a great deal of standardization required. The place of service has to bear

5846-412: The rights of the licensing party (e.g. make copies of a copyrighted work ), which, without the license, the licensed party could be sued, civilly, criminally, or both. In particular, a license may be issued by authorities, to allow an activity that would otherwise be forbidden. It may require paying a fee or proving a capability (or both). The requirement may also serve to keep the authorities informed on

5925-533: The rights pertain to. For example, a license with a territory limited to "North America" (Mexico/United States/Canada) would not permit a licensee any protection from actions for use in Japan. Again, a shorthand definition of a license is "a promise by the licensor not to sue the licensee". That means without a license any use or exploitation of intellectual property by a third party would amount to copying or infringement. Such copying would be improper and could, by using

6004-452: The scope of a patent. For example, a patent owner may authorize a licensee to make, use, sell, offer for sale, or import a patented product. Such agreements are typically referred to as a patent license agreement or a covenant not to sue . These agreements can last for a specific period of time (such as five years) or for the entire life of the patent ( i.e., until the patent expires). Patent license agreements may also be exclusive ( i.e.,

6083-509: The seminal work of Katz and Shapiro (1986) has been extended in several directions. For example, Bhattacharya, Glazer, and Sappington (1992) have taken into account that the firms acquiring licenses must make further investments in order to develop marketable products. Schmitz (2002, 2007) has shown that asymmetric information due to adverse selection or moral hazard may lead the research lab to sell more licenses than it would do under complete information. Antelo and Sampayo (2017) have studied

6162-480: The world. Being allowed to drive a certain vehicle requires a specific driving license, the type of license depending on the type of vehicle. In the United Kingdom prisoners serving a determinate sentence (a fixed time in prison) will be released prior to the completion of their full sentence "on licence". The licence is the prisoner's agreement to maintain certain conditions, such as periodic reporting in to

6241-506: Was little growth in franchising until the early 20th century, and in whatever form franchising existed, it looked nothing like what it is today. As the United States shifted from an agricultural to an industrial economy, manufacturers licensed individuals to sell automobiles, trucks, gasoline, beverages, and a variety of other products. The franchisees did little more than selling the products, though. The sharing of responsibility associated with contemporary franchising arrangement did not exist to

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