Licensee

Franchisees- Under a franchise agreement, the franchisee is granted permission to use the franchisor’s assets, such as supply chain, trademarks, or other intellectual property for a certain period of time. Typically, the franchisee is granted exclusive rights to those assets within a certain localized area.Examples of franchisees include the owner-operators of many retail stores or restaurants including some fast food locations.

Brand Licensing- In brand licensing, the licensee is permitted to use a licensor’s trademarks and logos on its own manufactured products, such a sports apparel or toys.For instance, a hit superhero movie may be released that generates a large fan base. The characters in the film are the property of the movie studio, but they decide to solicit licensing agreements from various producers of consumer goods. As such, the likenesses of these characters may appear on clothing, posters, lunch boxes, and in games. They may also appear as action figures or dolls. Note that the producers of all these items are unaffiliated with the movie studio and must pay fees or royalties per the licensing agreements that represent the movie’s brand.

Operating License- A licensee may also be an entity that has been granted legal or regulatory permission to operate. Such a license is a mechanism for governments to oversee, and in many cases tax, certain business operators. A liquor license is an example of this type. By issuing the license, a city or county ensures compliance with local regulations regarding alcoholic beverages and receives an additional revenue stream specifically associated with the sale of alcohol.Many types of businesses are required to obtain an operating license before being able to legally do business.1 These can range from food trucks to banks. Operating licenses can be granted at various levels of governance from local or state governments (e.g., for food trucks) all the way up to federal regulators (e.g., in the case of banks).A license to sell securities is a sort of similar permission granted on a state or nationwide basis. National licenses are granted by Financial Industry Regulatory Authority (FINRA), a private regulatory authority that enforces the rules governing registered brokers and broker-dealer firms in the United States. Examples include the Series 7 and Series 63 licenses.

Real Estate Licensees- An important use of licensee refers to permissions granted to access real estate. Typically, a licensee of a property has been granted express permission to make use of land by the owner. The property in question is not open to the general public.A common example used in law schools is that of a hunter who has written permission to hunt on a landowner’s property. Without this permission, the hunter would be considered a trespasser and under very little legal protection from hazards encountered while hunting there. Nor could the hunter be considered an invitee, a legal term to describe a guest with recourse to take legal action in response to damages suffered while in the property.

Other Requirements- In addition to paying any fees or revenues associated with being granted a license, licensees are often subject to requirements that they treat the granted permission responsibly. The hunter is expected to leave the property in the condition they found it. The securities broker is required to recommend investments appropriate to the client. The liquor store operator is prohibited from selling to underage customers.A license does not grant free rein to exploit the licensed rights, whether they be to a public or private asset.