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Franchise vs Intellectual Property


It has bothered me for a long time that people use these terms interchangeably when they are demonstrably distinct:

1. Intellectual property is any idea, brand, logo, name, likeness etc that you own or have a license/contract to use. You can use these to create new products like a series of themed Games ,or businesses like a new theme park.

2. A franchise is a contract allowing you to own an instance of an existing business model with all or most of its intellectual property included, like a branded restaurant chain. There should be a franchise owner who needs to be paid or give permission for new products or businesses to be generated and more than one franchisee contractee running the franchise business model.

Several Sports in the US operate like franchises with a central organisation owning the core business model, occasionally generating new franchise opportunities or relocating franchises when the sport is mature. European soccer does not operate the same way - sports teams hardly ever change cities, names and brands and when teams are bought or sold no contract is signed with the league (i think but not 100% sure)

I can't think of a gaming property that qualifies as a legitimate franchise despite the term being used often.

For eg EA owns the IP license to make Star Wars games. Each game doesn't qualify as its own franchise and EA doesn't sell a Star Wars game business model for another studio to issue its own new game.

Am I right about this and does this bother anyone else?
Last edited:

German Hops

Gold Member
My understanding is that the big company franchise returns are lower because of predictability.

For example, if you buy a franchise for a lesser-known-newer-franchise like Play Street Museum, then you can expect a higher profit margin because it's not predictable that you will succeed, and you're getting in on the ground floor.

With McDonalds, it's almost a sure thing. They give you everything you need to know to generate a modest but steady return. Yes, it's only 4-8%, but it's going to succeed pretty reliably.

Many people are very happy to sacrifice higher profits for predictability.

Creating IP's are higher risk, but have the potential for higher reward.
The way I see it the IP creator no longer being directly involved is what sets it apart from a franchise. Star Wars was not a franchise until it moved away from George Lucas. Much like a retail store that buys a pre-established brand and sells products through it, it is a new business capitalizing on old IP. A franchise.

IP is original spec produced by the creator, franchise is the derivative product contracted out to a new producer.
You're not wrong until you claim no game property qualifies as a "franchise." There are other definitions of "franchise," one of which would include game properties.
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