Natural Beautique: A Case Study

For a company looking to expand its business into a foreign market, an option available to them is to obtain a license agreement from an already established company in their market. A license is an agreement that allows one party to use an industrial property right in exchange for payment to the owning party. (Fred Luthans, 2015) In a typical license arrangement, the licensor allows the licensee to use a patent, trademark or proprietary information in exchange for a fee. The fee is most likely a percentage of all revenues earned and restricts the licensee to certain geographic location for a specific amount of time. Another option for Natural Beautique is to use a franchise agreement, which is very similar to a license agreement. A franchise agreement is a business agreement in which a franchisor allows another person or company to operate an enterprise using its trademark, logo, product line, and methods of operation in return for a fee. (Fred Luthans, 2015) This is most likely not the option Natural Beautique would want to use; as franchises are usually for the fast food and hotel industries. …show more content…
Using a license agreement, would allow us the opportunity to sell our product under a company that is already established in the organic makeup market. One other advantage of using a license agreement is that Natural Beautique would be avoiding trade barriers, because the licensor is already established in France. Other advantages of licensing are the amount of time of entry into France are reduced, and the investment risk of moving into the country are minimized, because we are limiting the amount of money spent; as the licensor already has met the government requirement of investing in the country. Where there are advantages, there are also disadvantages; such as lack of control over assets, the licensor could become a potential competitor, and the period of time under the license is