Franchising

One of the more common ways in which the commercial value of intellectual property is utilized is in franchising. Franchising is a method of doing business where a franchisor licenses trademarks as well as tried and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage piece of gross sales or gross profits as well as the annual fees. In most cases the franchisor is a business that has proven commercial value (for example a chain store or fast food outlet). Various support services such as advertising and training are generally made available by the franchisor, and may indeed be required by him. This generally requires audited books, and may subject the franchisee or the outlet to periodic and surprise spot checks.

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