Franchising is characterized by a structured relationship where the franchisor provides not just the rights to use a trademark or brand, but also a comprehensive business model and operational guidelines for the franchisee to follow. This includes strict operational rules regarding how the business is to be run, including branding, marketing, customer service, and sometimes even the specific product offerings. These operational standards help maintain a consistent brand image and customer experience across all franchise locations.
In contrast, licensing agreements typically allow the licensee to use the licensor’s intellectual property with much more flexibility and fewer operational restrictions. Thus, the emphasis on stringent operational rules in franchising is a key distinguishing factor that helps ensure uniformity and adherence to the franchisor's established business practices, unlike regular licensing agreements which may have a more lenient framework.