Give the advantages and disadvantages of licensing and franchising.

Solution

Advantages of licensing/franchising :

1. In this the Licensor or does not make any investment in other country.

2. Licensor does not suffer any losses.

3. Lower risks of government takeovers.

4. Licensee has greater market knowledge being a local person.

5. Other firms cannot copy the patents or trademark given to licensee/franchisee.

Disadvantages of Licensing/franchising :

1. Licensee may start his personal business for an identical product under a slightly different brand name.

2. Trade secrets can be leaked out to others in the foreign markets.

3. Conflicts may take place between licensor/franchisor or licensee/franchisee.

Some More Questions From International Business - I Chapter

For Daily Free Study Material Join wiredfaculty