I have a successful retail business that I'd like to expand. I am
approached by people all of the time asking to buy a franchise. I am
hesitant to set up a traditional franchise for many reasons (upfront
legal expense to create franchise agreements, additional staff needed,
enforcement of franchise agreements, etc.). I would like to expand my
presence however, so I'm investigating whether or not I can simply
license my name and business concept for a fee and ongoing royalty
(part of which would go into an advertising pool). I live in the state
of Illinois and all licensing would occur in Illinois. So here is the
question:

Is there a way that I can structure my licensing agreement so that it
does not fall under any franchise regulations, which leads into the
question of how does the state of Illinois define a franchise?

A great answer would include links to relevant portions of the
Illinois code pertaining to franchising and licensing, and any
examples (in Illinois) of similar licensing arrangements for retail
businesses. I understand that any answer given does not constitute
legal advice etc. etc. etc. Thanks!

Hi,

I will leave it to one of the eminently qualified Researchers to
provide the full answer under Illinois law, but I would like to make
one quick comment.  If you elect not to sell franchises, you can
certainly license your name and business model to whomever you wish. 
Just make sure that in whatever agreement you use to memorialize this
you place adequate controls over the quality of the goods or services
associated with the name.  If you fail to do this, if may be held to
be a "naked license," and you may be held to have forfeited your
trademark rights to your name.  FYI, companies license their trade
names (business name), trademarks (slogans, logos, associated with the
goods or services you sell) and trade dress (the look and feel of the
business) all the time without formally franchising.  I believe people
franchise because of the higher income potential, as opposed to simply
entering into a trademark license.