business areas

franchising

Franchising and licensing is a specialised areas and ENS (Edward Nathan Sonnenbergs) is adept at advising clients in these often confusing areas of potential business.   Confusion sometimes lies between the meanings of ‘franchising’ and ‘licensing’ with many making the mistake of thinking these two areas are synonymous.  The main difference between a franchisee and a licensee is that franchisees have more closely linked relationships to their parent company whereas licensee’s do not.  In addition, franchisees typically have the rights to their parent company’s trademark and logo which is of significant importance given that it demonstrates the relationship between it and the parent company.  Franchisors, or the parent company, are usually therefore more closely involved and offer levels of support or even training to franchisees and their employees in order to maintain the same levels of service and standards the franchisor does, ensuring continuity in the already established brand.

The relationship between licensees and the licensing company is not as closely bound as that between franchisors and franchisees and usually, licensees do not retain any rights to the parent company’s trademark or logo.   This means they need to establish their own identity in the marketplace and they also do not enjoy the same training and support benefits as given to franchisees.  They also do not usually receive territorial rights meanins that they are free to sell similar licenses and products within the same area.
However, franchises are usually more costly with start-up investments required as well as ongoing fees and royalty payments.

By working closely with FASA (The Franchise Association of South Africa) and, as a full-service law firm, ENS is able to offer clients an all-round solution to their franchising and licensing needs as well as assess the implications by considering all areas relating to our clients business sector.  These areas include intellectual property issues, accounting and tax, corporate agreements and restructuring, distribution schemes, employment contracts transfers, retrenchments, mergers and acquisitions, amongst many others.

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