Beginning entrepreneurs, as a rule, are faced with the question of where to start their business and how not to suffer financially. One of the best ways to minimize financial losses and at the same time gain valuable experience is to conclude a license agreement with the copyright holder of an intellectual property (IP) object or a franchising agreement (commercial concession) with a well-known company. Cooperation with such companies provides many advantages.

For example, when concluding a license agreement for an object of intellectual property (IP) - a registered trademark, patented invention, industrial design, etc., the licensor (copyright holder) grants the right to use it to another person (licensee). At the same time, the contract specifies the terms and conditions for using the facility, and establishes the amount and terms of payment of remuneration.

As a rule, companies that sell goods or offer services most often acquire trademark licenses. At the same time, it is most profitable for beginning entrepreneurs to purchase licenses from the copyright holder of a well-known brand, which significantly increases the attractiveness of goods and/or services for consumers, and therefore helps to increase income.

For the copyright holder, entering into a licensing agreement with the licensee is also beneficial, since it provides an opportunity to expand its business.

One of the most popular types of entrepreneurship not only among startups, but also experienced businessmen seeking to enter the international market is the franchising business model.

The franchise agreement is registered with Rospatent, like a license agreement, and plays a key role, both from a legal and commercial point of view, in the business relations of partners. According to the agreement, the rights to use IP objects are transferred by their copyright holder for a fee, but the main advantage is that the franchisee receives a ready-made model for running and developing a business, its technologies, and experience, which helps to minimize risks. It should be noted that if controversial situations arise that require immediate cancellation of the contract to eliminate possible risks and associated financial losses, the contract must take into account the conditions for their resolution.

A feature of building a business using the franchising model is the standardization of all business processes, the sale and promotion of goods and services, the use of technologies and methods of production of goods of their owner.

A significant disadvantage is that the owner dictates his own strict rules for doing business, the style of office design, their territorial location, and prohibits cooperation with competitors, which, within the framework of a licensing agreement, may be a violation of antitrust laws.

That is, the franchisee is obliged to follow all prescribed standards, instructions, recommendations and, despite the fact that he gets the opportunity to quickly open his own business, duplicating the model of its owner, at the same time he is deprived of independence.

It is also necessary to take into account that since all standards, recommendations and instructions relate to IP objects and are protected under copyright and/or know-how regimes (as trade secrets), they must be correctly formalized in the contract. At the same time, the franchisee is also obliged to introduce a regime for maintaining trade secrets in his company (for example, in relation to know-how, just like the franchisor). The design of commercial premises, the style of clothing of staff, can also be registered as an industrial design by their owner, and the rules for their use by the franchisee must be reflected in the contract. As a rule, shops, restaurants, cafes, travel companies, etc. operate under a franchising agreement, which, regardless of location, have the same design of premises, a similar style of clothing for employees, and offer the same products or services. Examples include the Baranka cafe, OZON marketplace, Pyaterochka stores, etc.

Despite the fact that the cost of a franchise is usually higher compared to a license, a significant advantage is that the acquirer receives a ready-made business, and not just access to certain IP objects and ways to use them.

However, when choosing a business model, it is necessary to proceed from its goals and objectives, and not from the price difference. It is important for the acquirer to adequately assess the copyright holder’s business, its competitiveness and popularity. If a budding entrepreneur needs a mentor to start a business, a franchising model is more suitable for him, and if the business has been operating successfully for some time, and the owner wants to expand it at the expense of other people's well-known brands, in this case, concluding a licensing agreement for individual trademarks may be the best solution.