Business Unfairness?

[tembre89]

Say a business has an exclusive license to sell equipment from a foreign manufacturer. Is it illegal or bad business practice to use that license to purchase the equipment (at cost) and use it to start a separate business. Is that unfair? Could it hurt the relationship between the business and the manufacturer?

[BizAdvisor]

That's pretty much how exclusive licensing works in a nutshell.

[Freelancier]

Is it illegal or bad business practice to use that license to purchase the equipment (at cost) and use it to start a separate business.
As long as you don't violate any minimum pricing requirements with your manufacturing partner and you pay the manufacturer for the equipment AND you pay mandated sales tax on the item (because that business would likely be the "consumer" of the equipment), you're good to go.

[tembre89]

Thanks you guys for the help.

I'll check to see if the licensing agreement prohibits opening a business with the equipment.