A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. 1 International-Expansion Entry Modes. Licensing and franchising share a few similar advantages. Technically, the contract binding. It is quite similar to the "franchise" operation. It reduces risks for both parties. In the franchising packages trademarks, copyright, patents and other things often are included. The licensor provides no technical support or assistance in most cases. 3. Choose from 29 different sets of Licensing, Franchising and other contractual strategies flashcards on Quizlet. When it comes to retail entrepreneurship, there are several ways to open a. A modern approach to international business. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. Brooke MA, PhD, FIEx & Peter J. Verified Answer for the question: [Solved] Which of the following is an example of intellectual property? A) systems of measurement B) McDonald's golden arches C) an unpublished book D) a phone directory. They are governed by a contract that provides the focal firm a moderate level of control over the foreign partner. Often regarded as second best to export or direct investment. Strategy 3: Franchising. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. Meaning. Flashcards. Some companies use direct exporting, in which they sell the product they manufacture in international markets without third-party. Franchising. Franchising only deals with the provision of a service, while licensing can be for both services and products. Match. Subscribe to newsletters Subscribe: $29. These options vary in terms of how much. Major global. Match. The license agreement permits the use of trademarks, nothing more. Study Resources. Which of the following is provided by the licensor in a licensing agreement? A) a monetary down-payment plus royalties for all products sold. Recent advances in digitalization and increasing integration of international markets are paving the way for a new generation of firms to use non-traditional entry modes that are largely marginalized in previous entry mode studies. 16: Licensing, Franchising, and Other Contractual Strategies unique aspects of. cross-border exchanges in which relationship between the focal firm and its. - Arrangement where owner of intellectual property grants another firm right to use property for specific time in exchange for royalties or other compensation. From a licensee standpoint, there are fewer risks in product development, market testing, manufacturing, and distribution. Learn the differences between licensing and franchising and why licensing is not an optional to franchising. B) franchise contract must include a foreign government. 3. c. Organising for the Strategy. But the Mouse’s actual 2023 number. Study with Quizlet and memorize flashcards containing terms like Strategic alliances involve: a. 1. Exhibit 15. Licensing vs Franchising The primary difference between a franchisee and a licensee is that franchisees can expect to have a much closer. , T/F Organizations as diverse as Disney, Caterpillar,. Licensing: An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. Read other and watch their success stories!. Financing is more costly in other countries. Similar to a licensing agreement, under a franchising Granting rights on an intangible property, like technology or a brand name, to a foreign company for a specified period of time and receiving a royalty in return. While franchising involves a more comprehensive relationship in which the franchisor provides ongoing support and guidance to the franchisee in addition to granting the right to use its business model and brand. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Unique aspects of contractual relationships. The five most common methods include exporting, licensing and franchising, partnering and strategic alliance, acquisition, and Greenfield venture. AI Homework Help. Flashcards. 3. Buckley BA (Econ), MA, Phd Chapter 90 Accesses Abstract This. embargo, In the context of various strategies for reaching global markets, which of the following strategies. Dispute settlement 4. Match. Process. S. Verified Answer for the question: [Solved] Which of the following is an advantage of franchising to the franchisee? A) reduced expenses as the franchisor provides supplies, equipment, and products B) Minimum initial investments or royalty payments are applicable. Contract Manufacturing: - This entry mode is a cross between licensing and investment entry. - contract provides focal firm with moderate level of control over foreign partner. 15. It’s a legally binding document that spells out—in great detail— the integrated touch points of running the business from the franchisor and franchisee point of view. Terms: a. 15. nontariff barrier d. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Exporting involves marketing the products you produce in the countries in which you intend to sell them. Multiple Choice . The Franchiser maintains significant control of, or provides significant assistance to, the franchisee’s operation methods. 47 I Use contemporary technology to minimize counterfeiting. Licensing term can be defined as “The method of operating in other country wherein a Firm of one country agrees to permit a company in another country to use the manufacturing, Processing, Trademark & other skill provided by the Licensor”. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. a. Match. 6. Angelica Weiss Chapter 16: Licensing, Franchising, and Other Contractual Strategies Contractual entry strategies in international business: cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract Intellectual property: ideas or works created by individuals or firms, including discoveries and inventions; artistic, musical. Contractual Entry Modes 3. Match. True/False . Licensing is a contractual agreement whereby, in exchange for a royalty or fee, a company gives the right to another company to use a trademark, know-how, or other proprietary technology. Change Product. 3 Describe the advantages and disadvantages of licensing. S. Many firms build biotech tags,. In other words, a licensing agreement grants the licensee the ability to use intellectual. The difference between licensing and franchising is that franchise agreements involve an extensive business relationship between franchisor and franchisee whereas license agreements are limited and relate to a. Similarly, explicit contracts define franchising relationships. Franchising VS Licensing. proficient interviews, and industry leading guides that cover everything from franchising basics to advanced franchise growth strategies. 1-1 BUS 434 Market Entry Licensing, Franchising, and Other Contractual Strategies 1-2 Contractual Relationships • Licensing: An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. Chapter 16 – Licensing, Franchising, and Other Contractual Strategies I. Verified Answer for the question: [Solved] Azoo Government Projects (Scenario) The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. 2. Brand licensing is the act of giving permission to another company to use your business’s intellectual property (IP). Contractual entry strategies in int’l business – cross border exchanges where the. Question 80. Exporting. For international trade, Foreign market entry modes are the ways in which a company can expand its services into a non-domestic market. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. Test. strategies. Firms can pursue them independently or in conjunction with other entry strategies. Type of Entry. Study with Quizlet and memorize flashcards containing terms like What does a contractual entry strategy in IB mean, Give forms of IP, What are the types of contractual relationships and more. 6. Licensing involves granting rights to use intellectual property, while franchising grants rights to use an entire business model. e. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. ( Multiple Choice) Question 2. This strategy is based on franchising, the market entry mode, Subway used in order to enter foreign markets. In this chapter, you will learn about: Contractual entry strategies Licensing as an entry strategy Advantages and disadvantages of licensing Franchising as an entry strategy. External: Operating Enviornment. Terms in this set (19) Contractual entry strategies. firm. • Licensing, franchising and other contracting These activities are carried out by a wide variety of institutions such as MNEs, small and medium-sized enterprises and financial entities. Exporting falls within the broad umbrella of market entry strategies that include a range of approaches to build international markets for your business. Question 1. to a foreign partner in exchange for a continuous the firm allows another the right to use an specific products, as well as the rights to distribute. 15. Licensing, Franchising, and Other Contractual Strategies. commercial centers provide the following services: business facilities; translation and clerical services; a commercial library with legal information; and assistance with contracts and export/import arrangements. Trademark LicensingCompanies which want to establish a retail presence in an overseas market with minimal risk, the licensing and franchising strategy allows another person or business assume the risk on behalf of the company. For courses in international business. Franchisee: A franchisee is a small business owner that purchases the right to use an existing business's trademarks, associated brands, and other proprietary knowledge. D) franchise contract involves less control and. Which mode is to be used in which situation 5. Licensees "rent" the brand from the owner, but are then expected to use their own expertise, capabilities and resources to innovate, produce, market and sell the. Ctrl+k Search questions by imageRetail franchising is the method of opening a single store under the umbrella of an established name, branding, trademark, and product line. Expert Help. Provide dynamic, flexible choice. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Flashcards. A) bribe government officials to reduce nontariff trade barriers B) have a subjective view of moral and ethical standards C) conduct advance research on the host country's laws on intellectual property D) appoint managers from the. Licensing concerns a product rights or the method of production marketing the product rights. For example, a restaurant or a salon can be franchised, but not the products they use to provide the said services. Exporting and foreign direct investing are two common types of contractual entry strategies. FDI in particular is now carried out not only by traditional MNEs but also by private investors, hedge funds, SOEs and even sovereign wealth funds. Subway is a company that has spread worldwide through its expansion strategy. In existing literature, most strategies are appraised as alternatives to exporting, or as alternatives to green-field FDI. 4. 15 ~ Licensing, Franchising, and Other Contractual Strategies. Your matched tutor provides personalized help according to your question details. B)It is an ownership-based international business activity. It can be classified into three major forms-. Franchisers must comply with the same local requirements as other businesses, and the franchise agreements must comply with local contract law, antitrust law, and trademark and licensing laws. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. As compared to other retailers, it is safe to say that IKEA has a unique organisational. Licensing: An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. What Are The Types of International Business. Intellectual property describes. ENTERING AND OPERATING IN INTERNATIONAL MARKETS; 13. Can be pursued independently or in conjunction with other entry strategies. b. provides technical specifications to a subcontractor or local manufacturer. turnkey contracting. 1. There are six basic options available: (1) exporting, (2) licensing, (3) franchising, (4) creating a joint venture or strategic alliance (5) acquisition/creating a wholly owned subsidiary, and (6) greenfield/wholly owned subsidiary (Table 9. Staffing leverage . Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. ) The many technological barriers to doing business globally. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Licensing. Patent. Disadvantages. format franchising — the licensing of a trademark in conjunction with a prescribed business format and method of operation can be dated to the nineteenth century, but did not develop in earnest until the 1950's. A. 3Describe the advantages and disadvantages of licensing. Exporting and Foreign Direct Investing are Two Common Types of Contractual. licensing is the limitation placed on licensing agreements. 0 (1. Licensing agreement specifies nature of relationship between licensor and licensee. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. Licensing, Franchising, and Other Contractual Strategies. , patents, trademarks, copyrights) in exchange for a fee or royalty payment. Test. The licensor provides no technical support or assistance in most cases. a. 2. 3. Contracts. With franchising, a foreign company essentially sets up a replica of the franchiser’s business, paying royalties and other fees to use its intellectual property, brand, and business model. Licensing typically involves royalties or. Licensing and Franchising. other contractual agreements and equity modes (wholly owned subsidiary or joint venture). From a licensor standpoint, there are fewer risks in the selling and service of what is being. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. Devaluation decreases the value of currency in relation to other currencies. OTHER CONTRACTUAL ENTRY STRATEGIES -Under build-operate-transfer (BOT) arrangements, the firm contracts to build a major facility, such as a power plant, which it operates for a period of years and then transfers to the host-country government or other public entity. What is Licensing and Franchising? Licensing is a contractual agreement in which one company provides another company in foreign country access to its patents, trade secrets, or technology in exchange for a fee known as a royalty. Which of the following is key to licensing strategy success? Avoidance of barriers for foreign companies doing business. The definition is important because franchises are covered by securities law while licenses are covered by contract law. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. C) licensing contract covers more aspects of operations. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. The Franchiser maintains significant control of, or provides significant assistance to, the franchisee’s operation methods. contractor supplies managerial know how. a. One of the major differences when it comes to franchising vs. What Are The Types of International Business. What are unique aspect of contractual relationship (5) 1. Foreign Direct Investment and Collaborative Ventures 408 15. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. Terms in this set (22) contractual entry strategies in international business. Contractual Entry Strategies. Intellectual Property rights – legal claims that protect proprietary assets of firms and indivduals from unauthorized use by other parties III. Unique Aspects of Contractual Relationships. Contractual entry strategies in international business. 15. export restraint b. The principal advantages of international franchising are: (i) Franchising is a beneficial way to. Unique Aspects of Contractual Relationships. On the other hand,. d. 15 Licensing, Franchising and Other Contractual Strategies. Business format franchising accounts for most of the explosive growth in franchising that has occurred in the past five decades. Franchising. Pages 6. Question 4. 3. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. master franchise. Study with Quizlet and memorize flashcards containing terms like In the context of international trade restrictions, offering less-favorable exchange rates to certain importers is a(n) _____. While deciding between franchising vs. Learn this differs between licensing and franchising and why general is not an alternative for franchising. d. Franchising 5. Internal: Operational. Study with Quizlet and memorize flashcards containing terms like contractual entry strategies in international business, intellectual property, intellectual property rights and more. Licensing Licensing is a contractual transaction where the firm the licensor offers some proprietary assets to foreign company the licensee in exchange for royalty fees (Kotabe and Helsen, 2010: 301). com Licensing • A company (licensor) grants rights to intangible property to another company (licensee). Contractual Entry Strategies. and industry leading guides that cover everything from francising principles to vorgeschritten franchise growth strategies. B) It ensures payment from the licensee to the licensor upon receipt of an export shipment. Test. In other words, ownership rights in franchising are seen in the ratio of company-owned to franchisee-owned stores and residual income rights, as traditionally conceptualized in Fig. View Overview. firms with industries, markets, and customs in other countries. The agreement so creates a franchise relationship is the franchise agreement and aforementioned parties to a franchise agreement are the franchisor and to french. Equity-based arrangements. An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. 2. The globalization of franchising took off in the 1990s as a result of push factors (domestic. BUS. Two common types of contractual entry strategies are licensing and franchising. School Anadolu University; Course Title BUS 1332; Type. C) They attract less attention and less of the criticism sometimes directed at firms. Why would a company choose to use a contractual mode of entry rather than an investment mode? Contractual forms of entry (i. Franchise: A franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business's (the franchiser) proprietary knowledge, processes, and trademarks in. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Intellectual property rights and more. Of course, when Switzerland let the value of its franc 30% against the euro, the cost of exports increased, and Swiss goods when bought with the franc, could be purchased at a large. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. Risk in franchising. Typically, the franchise agreement is for ten years. The most common methods firms join international trade are through contractual entry strategies such as direct exporting, franchising, licensing, management contract, contract manufacturing, buying a company, and joint ventures. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. licensee: In a licensing relationship, the buyer of the produce, service, brand or technology being licensed. By signing the franchise contract, a franchisee typically surrenders. Greenfield Strategy v. Franchising and licensing both offer business opportunities with some of the work already done for you, but that doesn't mean they're exactly the same. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other. Contractual Entry Strategies of Licensing and Franchising: 1. According to Franchise Business Review, franchising fees typically range from $25,000-$50,000 on average. Ch. Introduction. 15. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. Studying is made a lot easier and more fun with our online flashcards. Learn. Franchise Agreements are the core operating principles that define the relationship between the franchisor and the franchisee. 7. It reduces risks for both parties. 3. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. reduce local perceptions of the focal firm as a foreign enterprise Study with Quizlet and memorize flashcards containing terms like 1. Created by. C) The licensee cannot cancel the contract with the. In addition to paying an. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. In some cases, it’s either for five years or can be for 20 years. the firm enters a foreign market before other foreign firms - this is a proactive strategy. The specific definition of the license. A strategic alliance is a collaborative agreement between two or more companies to pursue mutually beneficial objectives. licensing. Turnkey projects 3. Licensees "rent" the brand from the owner, but are then expected to use their own expertise, capabilities and resources to innovate, produce, market and sell the. Since franchisees will assume many of the responsibilities otherwise shouldered by. Licensing, Franchising and other contractual strategies. Licensing is a contractual agreement whereby one company (the licensor) makes a legally protected asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation. Learn faster with spaced repetition. 2. The main difference between the two is the duration of the commitment involved. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. an advanced form of licensing in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or other forms of compensation. Chapter 15: Licensing, Franchising, and Other Contractual Strategies Key Elements Contractual Entry strategies in. Discover. 2 Understand licensing as an entry strategy. One of the major differences when it comes to franchising vs. Match. Zhao et al. A _____ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset. ) Finding financing for a new business in other countries. , Exporting and foreign direct investing are two common types of contractual entry strategies. e. Marketing in the Global Firm 464 17. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. . real business leading guides that top everything from franchises basics to advanced vote growth strategies. Exporting. docx from BUS 417 at Zayed University. Learn. 2. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. 4 ways to enter foreign markets. Advantages. chesiebels. franchising, wholly owned foreign subsidiaries b. licensing team. Solved . There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Table 7. Both licensing and franchising are really fantastic. Two common types of contractual entry strategies are licensing and franchising. Licensing is an arrangement in which a company (licensor) sells the right to use intellectual property or produce a company's product to the licensee, for royalty. View BUS 417 . _____ these are the items owned by a franchisee that has the same monetary value. View final ch 15 man3600. arrangement in which the focal firm or a consortium of firms plans, finance, organizes, manages. Arrangement in which an independent company is licensed to establish, develop, and manage the entire franchising network in its market and has the right to sub franchise to other franchisees, assuming the role of local franchisor. Created by. 15. A license is much more limited than a. Let’s take a look. 2. Intellectual property rights (IPRs) legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties, monopoly advantage for specified period of time. Methods for General Eintrittspreis into the Total Marketplace. A) Nickelodeon B) The Walt Disney Company C) Mattel D) Major League Baseball Services Discover Topics Ask a questionVerified Answer for the question: [Solved] To minimize the complexity of franchising, focal firms must ________. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual Property, Intellectual Property Rights and more. 15. LICENSING AND FRANCHISING . at completion of the contract, the foreign client is handed the "key. 1. Patent licensing is one of the most expensive licensing. It stated the market entry strategies of global hotel industry followed Cruz (1999)’s ‘Management Contract first, franchising latter’ strategy. Contractual entry strategies in international business. An organisation will need to determine their desired level of commitment, flexibility, control, presence and risk when going global, in order to choose the entry mode which best suits their situation. Verified Answer for the question: [Solved] Which of the following is characteristic of exclusive licensing agreements? A) The licensor is not allowed to interfere with the production or marketing of the licensed asset. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. 1 International-Expansion Entry Modes. The legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties. The difference between a franchise contract and a licensing contract is that a. Keep in mind, however, this is strictly the franchise fee and doesn’t include other startup costs to open the. B) franchising. Franchising makes up 10% of the U. It. 3. Moderate-Control Strategies (Licensing, Franchising and other Contractual Strategies, Project Based (non-equity) collaborative ventures) "Moderate": -control available to the focal firm over foreign operations. -most often begun with export. caitlyn_stryker. Licensing refers to a business arrangement, where a company (licensor) sells its intellectual property to another company (licensee), or the right to produce its products, for a specified fee (royalty). Focal firm has moderate level of control over the foreign partner. A franchisor may not enforce a terminable-at-will contract clause in a jurisdiction that requires good cause to terminate a franchise agreement—even if the franchisee’s attorney actively negotiated the contract and the franchisee is given the sameLearn Licensing, Franchising and other contractual strategies with free interactive flashcards. ( Multiple Choice) Question 2. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. the franchising and licensing as market entry mode in general and in hotel industry. A license is much more limited than a franchise. 4. Licensing 4. View chapter 15. U. Strategies: Licensing, Investment, and Strategic. Uploaded By ebrarpatriot. 2 Understand licensing as an entry strategy. 6 Understand other contractual entry strategies. c. Chapter 15: Licensing, Franchising, and Other Contractual Strategies. is defined as a contractual arrangement whereby one company makes a legally protected asset available to another company in exchange for some form of compensation. B) An Indian automobile manufacturing company buys engines from a Japanese manufacturer for its. Licensing gives a company greater control than franchising over the sale of its product in a target market.