Licensing vs. Biz Op vs. Franchise...

5 replies
I've been looking at these three things for a while online and off.

There never seems to be a solid consensus as to which fits for an online business.

Here is what I'm wanting to do for my business model with a new start up:

  • Have a national brand across Canada & the USA.
  • Have territories for "local marketers" to acquire new clients and customers
  • These territories for $XX.xx dollars a year
  • Plus a % cut to my company
My company will in turn offer:
  • Use of brand name and logo
  • Stationary templates
  • POS Templates
  • Handle transaction fees ( 2% - 6% dependent on volumes)
  • Pay out weekly earnings
  • Handle affiliate commissions
  • Handle Support for marketers/ clients & customers
  • Training
  • R&D
Now a lot of people have suggested licensing and I can see this being very effective as I'm looking at a "Lease" of sorts per territory each year and taking a percentage.


But there have been even more people saying that because I offer training, use of a brand name etc.. I have to go with franchising.


Then there is the Biz Op avenue but I'm looking at more than $500 one time fee with the yearly and percentage fees. Which then again throws back to the license vs. franchise.


In my research I've even come across a yogurt chain that claims to not be a franchise but a license agreement which blows my mind as it fits everything about a franchise.


I digress.


Now I have an new thought, to me anyways, maybe not to many out there.


I was thinking about"Area Partner" agreements for each territory and that way I should be able to charge the yearly fee and the percentage. Then I would just have to state the value of their partnership is ever changing as new area partners come on and grow the company. Thus changing each partners % of the company while in some way I always maintain a minimum 51% controlling interest with out getting into shares.



How does this sound?


Is it viable?


Is it legal even?


Any suggestions?


I thank everyone in advance!
#biz #biz op #franchise #licensing #partners
  • Profile picture of the author gjabiz
    Area controlled distribution rights are commonplace. Usually done by populations. Licensing is a solid way to go, there are many "franchise" type operations that have a license agreement and they avoid all the franchise regs.

    You want a RENEWABLE annual license, not a piece of their pie, be the supplier, they act as a retailer for you. Since it is training, I think I'd start with just a licensing deal.

    gjabiz

    PS. I know a guy who is an expert on this, if you want to PM me, I'll pass you along.
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  • Profile picture of the author Randall Magwood
    How much money are you looking to make from this? Why not sell something much simpler (but still very profitable), and avoid all the headache?
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    • Profile picture of the author Anderson2014
      My why's are big for my family.

      But the overall reason for the why bother with the headache?

      Well that is because:
      • I honestly believe that there is nothing worth building that does not take some real work,
      • I want to help others succeed,
      • I feel the best successes come from helping others.
      • I want to contribute to as many people and communities on local levels as I possibly can.
      Once I'm able to get things rolling, and correctly, my business plan will benefit three sectors outside of myself. While also improving on an existing industry by reducing fraud and increasing the bottom line for merchants.


      As for how much money am I looking to make off of this?


      Potential is millions over time, but nothing if I do this wrong. Definitely not get rich quick. But quick enough to replace a living salary.



      The bottom line is to work no more than I do now, 50 - 60 hours per week, and hopefully while leveraging the efforts of others and supplying them with support and a "Head Office" to guide the business as it grow, to reduce my time at "work".


      Not to mention the connections that will be made through this business model are potentially priceless.


      The product is simple, and the back end product even simpler and easier to sell after the initial product. Product costs are very low with high end earnings potential.


      In the end definitely worth any headaches that may come.
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      • Profile picture of the author MrFume
        So what exactly are you selling, a 'done for you' online business platform, marketing training-I can't discern the core product-perhaps I am not looking properly?
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        • Profile picture of the author Anderson2014
          Well I haven't said what exactly it is as that is not public forum consumption yet nor am I selling it yet.

          I've only shared the very basics of the ideals and end goals.

          But to settle curiosity, I've developed a system that will reduce fraud, increase merchant participation, increase merchants money in hand, give local marketers a brand to build their independent business with support from my company and offers follow up marketing for merchants. Using the group buy / daily deal platform plus follow up marketing directly to the consumers that have shown interest in any particular business. There is the front end and back-end products in a nutshell.

          I've been working out the system for a little over a year.

          But what I'm looking for is if there is anyone out there that has used the "Area Partner" agreement to avoid being a franchise. As I see this being a more favorable approach as far as time and expense.

          I also want to avoid taking on a top level partner as long as possible if not at all.

          Basically I know that I can't build a national brand on my own and want to leverage others without giving up control of my company.
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