ExpandingYourWorkerCooperativeBusiness AGuidetoLicensing&Franchising
GUIDESUMMARY
Licensing and franchising are both ways of expanding a business by allowing others to use the intellectual property (brand, methods, etc ) of your current business New businesses can grow using elements of your cooperative, and together, you may be able to reach economies of scale
What is licensing and franchising? Licensing and franchising are related to each other but also are different. Every franchise is a license, but not every license is a franchise One of the main factors distinguishing whether a license is a franchise is how much control the original business (known as the licensor or franchisor) has over the operations of the new business (the licensee or franchisee)
● More control by the original business over the new one = franchise
● Minimal control over the new business = license
What do licensing and franchising look like for cooperatives? When worker cooperatives are the licensor/franchisor and licensee/franchisee, there likely will be different considerations than traditional licensing and franchising relationships. How might you preserve worker control within the licensee/franchisee cooperative and give worker-owners a voice in the overall structure? How might you lower the costs of taking on a new coop as a licensee/franchisee? The Guide provides two case studies–Brightly® , a franchise of residential and commercial cleaning cooperatives, and Radiate Consulting® , a network of worker cooperatives that licenses the brand name and provides a variety of consulting services. Both are expansion models created with the support of nonprofit cooperative development organizations
Which method of expansion is best for your coop? The Guide includes exercises to use internally to help you decide. The initial questions are:
● What are your goals for expansion? Why do you want to expand?
● What should you replicate from your current business? What makes your coop unique? Do you have a profitable business model? A strong brand? A strong network of vendors or partners? Technology that improves operational systems?
● Isyourcoopreadytoexpand?Isthebusinessconceptstrongenoughto replicate?Doyouhaveenoughpeople,toolsandcapitaltodedicate?Are othersasinterestedinyourconceptasyouare?
Next,theGuidecontainsascorecardthatgivesyouascoretohelpdetermine whetheryourgoalsalignmorecloselywithlicensingorfranchising.Itasksyouto considervariouswaysyoumayormaynotwanttohavecontroloverthenew business.
Howdoyougoaboutlicensingandfranchising? Onceyouhavedecidedtopursue expandingyourcooperative,thereareanumberofstepstotake.Themoretechnical stepswillrequireworkingwithalawyer.Itishelpfultoseeklegaladviceearlierinthe processratherthanlatersothatyoucangetaclearsenseofwhatyouwillneedas youexpand.TheGuidewalksyouthrough(a)howtoidentifyandsecure(obtaina registeredtrademark,forexample)whatyouwishtoreplicate;(b)optionsfor structuringtheoverallrelationshipbetweencooperativesandacooperative developerifapplicable;(c)developingaplanfor financingthecreationand maintenanceofafranchiseorlicenseincludingapproximatecosts;(d)seeking and/ordevelopingprospectivecooperators;(e)stepstolicenseandfranchise includinggenerallegalrequirementsandoperatingsystems(infrastructure) development.TheGuidesynthesizeslessonslearnedinsupportinggroupswith licensingandfranchisingexpansionprojects.
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Ifyoureadthissummaryandwanttodigdeeperintofranchisingandlicensingfor workercooperatives,downloadthefullguidehere.