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Question added to topic Legal Basics For StartupsJanuary 24, 2008

How do I set up a cost or royalty fee for running a replica of my website in another country?

I have a US brand product. A client wants to sell the same product in the UK and create a website that matches my US website. Is this franchising and licensing? If so, can I charge money or royalty fee for the use of my art and website code?
You can certainly set up a royalty or commission sales arrangement with anyone wanting to sell your products. It's not clear from your brief description, though, whether using an exact replica website is an absolute condition of selling your product (e.g., is part of the business model the client is buying into) or whether it's just a matter of convenience for the client. That, and other questions, should be reviewed with an attorney specializing in franchise law to see whether you have crossed the line between a license and a franchise. The reason for this is that you cannot legally establish a franchise without it being registered with the state franchising authorities and possibly the Federal Trade Commission. In addition, different states have slightly different criteria for when you cross the line from one to another.

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.

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