When considering purchasing a business franchise, it is important to consider opportunities abroad and in the domestic market. For this reason, it is highly advantageous for the potential franchise buyer to become familiar with the international franchise and licensing market.

Franchises and licenses involve a minimal commitment of resources and effort on the part of the international marketer, and are easy ways to enter foreign markets. Under international licenses, a company in one country (the licensor) allows a company in another country (the licensee) to use its intellectual property (such as patents, trademarks, copyrights, technical knowledge, and marketing skills).

The monetary benefit to the licensor is the royalties or fees paid by the licensor. In many countries, the government regulates such fees or loyalties. These feeds do not exceed 5 percent of sales in many developing countries. A license agreement can also be cross-licensing, in which there is a mutual exchange of knowledge and / or patents. In cross licensing, a cash payment may or may not be involved.

Franchising is a form of licensing in which one parent company (the franchisor) grants another independent entity (the franchisee) the right to do business in a prescribed manner. This right can take the form of selling the franchisor's products, using its name, production and marketing techniques, or general business approach. One of the common forms of franchising is for the franchisor to supply an important ingredient for the finished product.

The main forms of franchising are manufacturer-retailer systems, manufacturer-wholesaler systems, and company-retailer service systems. International franchise / license agreements have grown substantially. As an entry strategy, franchising and licensing does not require capital investment or marketing knowledge and strength in foreign markets.

Another advantage of the franchise is that it can be used as a preventive strategy against competitors by combing foreign markets before competitors can enter. Additionally, many companies have used franchises to collect their outdated products, http://www.mergerscorp.com/.