In addition to franchising, there are two additional methods which are common to businesses seeking to expand. These methods are: (1) licensing, and (2) distribution.
Licensing
Licensing is the method by which a licensor grants a licensee the right to use its trademark for a specified fee. Unlike a franchise, which licenses the trademark and the business system, a licensor has less control over the licensee’s operations.
Distribution
Distribution is the method by which a manufacturer or a supplier of goods will use an independent distributor to market and sell its goods. The distributor generally purchases the goods in bulk and markets and sells smaller quantities of the goods under a name which has no connection with the name of the supplier. The distributor generally has a great deal of leeway in how to run its business.
