The difference can be summed up in one sentence: a trademark licence transfers a right; a franchise transfers a system. In a licence, the trademark owner grants permission to use its trademark for particular goods or services, and the relationship largely ends there. In a franchise, however, the trademark is part of a package that comes with know-how, a business model, training, ongoing support and strict supervision. Hence the rule: every franchise contains a trademark licence, but not every trademark licence is a franchise.
In short:
- Licence = permission to use the trademark. Its legal basis is Turkey's Industrial Property Code (Law No. 6769); a written agreement is sufficient, and it can be recorded in the register.
- Franchise = trademark + business model + know-how + support + supervision. There is no specific statute governing it; it is an innominate contract subject to general contract law.
- The payment models differ: in a licence, a licence fee; in a franchise, typically an entry fee + royalties on turnover (+ an advertising fund).
- The foundation of both is a registered trademark; neither can be set up soundly on an unregistered sign.
- For the purposes of the use requirement, authorised use is deemed to be use by the trademark owner — a side benefit common to both models.
This article compares the two models; we cover the clause-by-clause structure of a licence agreement in depth in our Trademark Licence Agreement guide, and the trademark side of a franchise system in our article Trademarks in Franchising.
Defining the Two Models
What Is a Trademark Licence?
A licence is the grant by contract to another party of the right to use a registered trademark, with ownership remaining with the trademark owner. Its scope is flexible: it can be granted for all or some of the registered goods/services, for a fixed term or indefinitely, reserved to a single user (exclusive) or open to several users (non-exclusive). The statutory presumption is important: unless otherwise agreed, a licence is not exclusive — if the agreement is silent, the trademark owner may continue both to use the trademark itself and to grant licences to others.
What Is a Franchise?
A franchise is the transfer, for consideration, of a business system — trademark, know-how, product standards, operations manual, supply arrangements, training and ongoing support — to be applied in the franchisee's independent business. Under Turkish law there is no specific statute regulating franchising; the relationship is an innominate contract shaped by the general provisions of the Turkish Code of Obligations (Law No. 6098) and by case law. Permission to use the trademark is an indispensable, but not the only, part of this package.
Comparison Table
| Aspect | Trademark Licence | Franchise |
|---|---|---|
| What is transferred | The right to use the trademark | Trademark + business model + know-how + support |
| Legal basis | Industrial Property Code | No specific statute; general provisions of the Code of Obligations, case law |
| Form | Written agreement (no notarisation requirement) | No prescribed form; in practice a detailed written agreement |
| Recordal with TÜRKPATENT | The licence can be recorded in the register (2026: TRY 9,870) | The agreement is not recorded; the licence element within it can be recorded |
| Payment model | Licence fee (lump sum and/or share of turnover) | Entry fee + royalties + an advertising fund in most systems |
| Supervision | Quality control as set out in the agreement; relatively loose | The essence of the system; continuous and strict |
| Training and support | As a rule, none | A contractual obligation |
| Independence of the parties | The licensee applies its own business model | The franchisee complies with the franchisor's system |
| Typical use | Permission to manufacture/distribute, monetising the trademark | Growing a chain (cafés, grocery stores, service networks) |
| After termination | The right of use ends | Use ends + exit from the system: removal of décor and signage, return of know-how, non-compete obligation |
The Differences in More Depth
Supervision: The Line Between a Loose Tie and a Strict System
In practice, the litmus test for the distinction is supervision. In a licence, the trademark owner supervises product quality to the extent set out in the agreement; the licensee runs its own business as it sees fit. In a franchise, by contrast, everything from signage to service flow, and from suppliers to staff training, is tied to the system's manual — because consumers expect the same experience at every point in the chain. If you have written "franchise" on your agreement but have not set up a supervision mechanism, what you have actually created is a licence; conversely, if your agreement headed "licence" also transfers the business model and ongoing supervision, it may come to be treated as a franchise by the courts. What is decisive is the content, not the title.
Payment: A Single Item Versus an Income Partnership
A licence fee is typically simple: an annual lump sum, a percentage of turnover, or a combination of the two. The payment structure of a franchise reflects the system itself: an entry fee at the outset (the price of joining the system), royalties on turnover while it operates and, in most systems, a contribution to a joint advertising fund. From the trademark owner's point of view, a franchise has higher income potential; in return, training, support and supervision are no longer rights but obligations — a franchisor that falls short of them becomes the party in breach of the agreement.
The Register: The Visibility of a Licence, the Invisibility of a Franchise
A licence is a transaction that can be recorded in the register, and an unrecorded licence cannot be relied on against third parties acting in good faith. A franchise agreement as a whole, however, is not TÜRKPATENT's concern — the Office takes no interest in know-how or operations manuals. The right practice is to have the permission to use the trademark contained in the franchise package separately recorded in the register as a licence; the franchisee's use is then documented against third parties as well. Chains that skip this step leave their franchisees' legal position up in the air in the event of an assignment of the trademark or a dispute.
After Termination: Two Different Ways of Closing the Door
In a licence, the end of the relationship is relatively simple: the right of use ends, the licensee stops using the trademark, and the entry in the register is removed. In a franchise, however, the separation is a process in its own right — removal of signage and décor, clean-up of packaging and digital assets, return of know-how and continuing confidentiality, and in most agreements a non-compete obligation for a period. This difference needs to be recognised at the drafting stage: the part of a franchise agreement that generates the most disputes is not the set-up clauses but the exit clauses.
Related Concepts Often Confused with Licences and Franchises
- Dealership: Authority to sell the manufacturer's products; the dealer operates under its own trade name, there is no transfer of a business model, and use of the trademark is limited to the sale of the products. As system transfer is added to the agreement, the relationship moves closer to a franchise.
- Distributorship: A right of distribution in a particular territory; what is transferred is not the trademark itself but trade in the branded products. There is no question of the distributor using the trademark in its own manufacturing.
- Letter of consent: Permission given for someone else to register a similar trademark; it does not create a relationship of use but removes an obstacle to registration. It is a tool for coexistence, not for letting others use the trademark.
It is not the name of an agreement but what it transfers that determines which category it falls into — and wrongly labelled agreements end up subject to unexpected rules when a dispute arises.
The Common Denominator: Both Require a Registered Trademark
Whichever model you choose, the core of what you are selling is your trademark, and neither can be built on an unregistered trademark. What is more, the two models share a common gift to the trademark owner: under the law, use of the trademark with the owner's consent is deemed to be use by the owner. An owner who has withdrawn from production but keeps the trademark alive through a licence or a franchise network also remains safe in the face of the five-year use requirement — provided that the use can be documented.
Which One Should You Choose?
The decision lies in the answers to three questions:
- What do you want to transfer? Only the use of the trademark → licence. A proven business model together with the trademark → franchise.
- How much burden can you carry? If you do not have the staff to deliver a training programme, field inspections and ongoing support, you will be crushed under the promise of a franchise; a licence + a strict quality clause is more realistic.
- What will the consumer see? If you are building a retail/service concept where customers will expect the same experience at every outlet, a franchise; if you are taking your trademark onto another manufacturer's product, a licence is the right tool.
For those choosing the licensing route, we have gathered the points to watch in two separate guides: the guide for licensors and the guide for licensees. A map of all the ways of letting others use a trademark is in our article Can You Let Others Use Your Registered Trademark?
Conclusion
A trademark licence and a franchise are not two scales of the same need but two different worlds of contract: one transfers a single right and lives within the framework drawn by the Industrial Property Code; the other transfers a business system and is built in the broad but unprotected territory of general contract law. When choosing, look at the content rather than the title, and at the obligations you can carry rather than the promise of income — and whichever you choose, make registration of the trademark and recordal of the licence element in the register the foundation of the system.
Planning to Let Others Use Your Trademark?
Share your goal — permission for a single manufacturer, or a chain — with us through our contact page; we will check whether the scope of your trademark registration is sufficient for that model, and build the trademark side of your licence or franchise structure with you, from the agreement through to recordal in the register. Our legal protection team takes care of the contractual and dispute side.