Licensing is a method of doing business. It is a method of marketing a product and/or service which has been adopted and used in a wide variety of industries and businesses. In some sense, it is a strategy for market entry. The word "franchise" literally means to be free. In this sense, licensing offers people the freedom to own, manage and direct their own business. However in reality, licensing is hardly free. By paying a certain amount of money, licensees can have the authority and privilege to operate under certain business models and be able to share the goodwill of certain brands.
As with any freedom, there are responsibilities. In licensing, these responsibilities have to do with the licensees' commitments and obligations usually spelled out in a licensing system. The licensing system, sometimes called the licensor, is the one who owns the right to the name or trademark of the business. The licensee is the one who purchases the right to use the trademark and system of business.
Row-Six™ falls into the type of license agreement where the business format in which there is a complete identification of the licensor with the licensee. The business format for licensing offers the licensee not only a trademark and logo, but a complete system of doing business. Indeed, the word "system" is the key concept to “Licensing.” A licensee receives assistance with site selection of the business, personnel training, business set-up, advertising, and product supply. For these services the licensee pays an up-front license fee and an on-going royalty, which enables the licensor to provide training, research and development, and support for the entire business. In a nutshell, the licensee purchases someone else's expertise, experience and method of doing business.
Meanwhile, the licensee agrees and promises to follow the system to ensure proper operation. In its infancy merely two decades ago, international franchising has become a major force in the world economy today. Licensing is gaining popularity throughout the world, and is emerging as an effective way to conduct and grow successful businesses. Yet the global marketplace is far from saturated. In fact, the growth potential for licensing worldwide is exponential.
Companies from near and far are flocking to Asia's ripe market and receiving a warm handshake from natives ready to do business. Although Japan and Australia have taken advantage of licensing for quite some time, many Asian countries are just beginning to discover that licensing is an attractive way to grow their economies.
This section contains information on key components that forms the Business License where compliance with standards set by the Licensor are mandatory and will be audited.