Meaning of Licensee: A party that receives the rights to officially conduct business under the brand name and values of a licensor is known as a licensee. Just like a franchise, a license does not come for free either. A licensee can pay its owner in two ways—at the time of the deal or in installments from the revenue collected from the gross sale. As a licensee, it is their responsibility to represent what the company name stands for and ensure that the original image of the brand stays intact while gradually improving in all respects.
Concept of Licensor: In any business, an organization that grants the other party the legal rights to all its resources is known as a licensor. This can be intellectual property, finished products, or even client-based services. By licensing, the capital required to be invested goes down while there is a surge in remuneration. Similar to franchising in this context, licensing can be an easy way of spreading the reach of a business venture and catering to a larger population. This, in turn, increases the target demographic and eventually generates more profits.