When considering buying a business franchise, it is important to consider opportunities abroad as well as in the domestic market. For this reason, it is highly advantageous for the potential franchise buyer to familiarize himself with the international franchising and licensing market.

Franchising and licensing involve a minimal commitment of resources and effort on the part of the international marketer, and are easy ways of entering the foreign markets. Under international licensing, a firm in one country (the licensor) permits a firm in another country (the licensee) to use its intellectual property (such as patents, trademarks, copyrights, technical know-how and marketing skill).

The monetary benefit to the licensor is the royalty or fees that such a licensee pays. In many countries, the government regulates such fees or loyalties. These feeds do not exceed five per cent of the sales in many developing countries. A licensing agreement may also be one of cross licensing, wherein 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 a parent company (the franchiser) 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