In most licensee arrangements, companies pay for access to intellectual property. Plus, a percentage of licensee revenues is often paid to the corporation as client contracts are signed. Licensees are typically (but not always) assigned geographic territories, and long-time policies about territory infringement prevent conflicts.
Successful license-driven corporations don’t stop there.
Corporations that had accepted just about anyone in the early years become increasingly more selective about which companies will be added to their family of licensees as time goes by.
Policies about territorial infringement get established to ensure fairness, reduce confusion and prevent conflicts.
As independent businesses, licensees make their own decisions regarding how to operate their businesses (hiring, firing, compensation). Unlike franchisees, there is no corporate mandated business model. Licensees are not required to run their businesses using the corporation’s forms or budgets.
Recognizing the value of education, many successful corporations provide their licensees easy access to conferences, seminars, webinars, teleseminars and books. Just because a licensee owns a business doesn’t mean he/she can understand his/her own profit/loss statement, recruit and select the best job candidates, evaluate software, create a marketing plan, attract new customers or sell additional services to existing customers.
License-driven corporations may not have the responsibility and the legal risks associated with how their licensees run their businesses, but the successful ones have very effective marketing (especially a great online presence), keep investing in product development and provide business operation and sales training for their licensees.
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.