Taking out a license works in a way similar to franchising or exclusive representation. However, the licensee does not buy goods but intangible assets such as patents or private labels.
The owner sells the licensee the right to use its patent, design or trademark, for example. Licensees and exclusive representatives are self-employed entrepreneurs. They work for themselves.
In the case of license and exclusive representation contracts, caution is required: there are no fixed regulations in Switzerland. Case law defines these two concepts. Anyone wanting to enter into a contract of this kind must always seek advice from a qualified person.
It is difficult to determine the advantages and disadvantages of exclusive representation or taking out a license. Before signing a contract, entrepreneurs must carefully sound out the commercial potential of the sector in question and gather information about the partner and the product or patent.