A Brand Licensing Agreement Provides

OPEN Forum describes trademark licenses as “legally protected agreements by which a third party rents the use of the company`s trademark, name, or likeness to another company.” In its simplest form, it is a contract that allows one company to use another company`s brand creation. One of the most important elements of a licensing agreement is the financial agreement. Payments made by Licensee to Licensor are generally made in the form of guaranteed minimum payments and royalties on sales. Royalties generally range from 6% to 10%, depending on the specific property and the licensee`s level of experience and sophistication. Not all licensors need guarantees, although some experts recommend that licensors receive as much compensation as possible in advance. In some cases, licensors use warranties as the basis for renewing a license agreement. If the licensee reaches the minimum turnover, the contract is extended; otherwise, licensor has the option to terminate the relationship. If you allow another company to use your name, logo or image on its products, you are taking a calculated risk. Your brand is automatically associated with the quality and content of these products and, to some extent, is held responsible for them. For this reason, it is important to include quality assurance terms in your license agreement. The license also specifies the specific products to which the contract is limited. Regardless of the size of your retailer, brand licensing is always a possibility at all levels. That`s why it`s beneficial to understand the basics of what this means and how you can get a trademark license.

Whether you become a licensee or a licensor depends on you, your brand, and your goals. Quality Assurance – You can include a section asking them to perform certain tests to ensure the protection of your product (i.e., quality, shelf life). If you decide to work with another company on your product, your brand will automatically be associated with the quality of the product that someone else produces. Choose wisely. How will your share of revenue from licensed products sold work? Your trademark license details the structure of your financial compensation. The licensee may pay an upfront fixed fee for licensing your trademark and ongoing royalties (usually a fixed percentage of the unit price or a certain amount in dollars) for each licensed product sold. The answer is brand licensing. Disney doesn`t make all the t-shirts or coffee mugs with one of their characters — thousands of other companies sign deals with Disney for the right to use their characters and other brands. And these companies take care of the essential details, such as the manufacture and manufacture of these products. In May 2018, Nestlé and Starbucks entered into a $7.15 billion coffee license agreement. Nestlé (licensee) has agreed to pay $7.15 billion in cash to Starbucks (the Licensor) for the exclusive rights to sell Starbucks products worldwide (single-serving coffee, tea, sachet beans, etc.) through Nestlé`s global distribution network.

In addition, Starbucks receives royalties on packaged coffees and teas sold by Nestlé. Licensing means the lease or lease of an intangible asset. It is a process of creating and managing contracts between the owner of a trademark and a company or natural person who wishes to use the trademark in relation to a product for an agreed period of time in an agreed territory. Trademark owners use licenses to extend a trademark or character to products of a completely different nature. [1] There are many ways in which a licensing agreement can significantly boost your business, including: Licensing your brand is not a one-time process. If you want to aggressively pursue brand licensing as a growth engine for your brand, it`s best to develop an overall strategy that outlines what you`re looking for in a potential licensee. This way, you can quickly decide which companies you want to target and approve. As your brand grows, your customers` wishes and expectations grow with you. As a small retailer, it can be difficult to expand your business and product line in a meaningful way that meets the expectations of these customers. Licensing your brand is a way to bridge the gap between your manufacturing and product design capabilities and the products your customers are looking for.

Also, make sure you create a License Global user account and access thousands of additional FREE license resources and best news from around the world. As part of your account, you`ll have access to our daily industry newsletters and our comprehensive catalog of tips, case studies, and white papers. We also encourage you to learn more about our licensing events by visiting the Global Licensing Group events page. The Society of Product Licensors Committed to Excellence (SPLiCE) is a Community of Practice of Licensors whose vision is to continuously improve brand licenses. SPLiCE`s mission is to act as a community of licensors sharing best practices to protect, promote and enhance brand integrity. The SPLiCE Licensors` Workshop acts as an annual Board of Directors and a General Assembly. During the Licensors spliCE workshop, benchmark results and industry trends will be highlighted in feature panel presentations relevant to the wider community. They are committed to a philosophy of creativity of divergence and convergence to maintain a unique application of ideas to best practices.

The vision of the SPLiCE Licensor Workshop is to provide training on licensing best practices through the exchange of educational best practices through benchmarking initiatives, working group collaborations, committee reports and guest industry speakers. Walking through each trade aisle illustrates the impact that licensing has both on the consumer and on an increasingly diverse range of retailers, brands and manufacturers. Licenses can completely extend a brand into new categories, areas of a store, or into new stores. It`s a way for brand owners to expand their current fan base and embark on new ventures without making big investments in new manufacturing processes, and allows retailers and manufacturers to stand out from the competition and offer consumers the hottest brands as well as increase sales. Once you`ve gone through the basics, a brand license agreement takes into account all the details involved in the collaboration between two companies. For example, the licensee (the company that acquires the licensing rights to a trademark) often reimburses a portion of each sale of the licensed product to the licensor (the trademark to be licensed). Purpose – a complete description of the product or service offered for licensing. This is also the area in which patent, copyright or trademark numbers can be included. There you go. The undeniable advantages of building a trademark license agreement.

Wherever you intend to run your business, you know you have options for greater brand visibility, long-term growth, and the benefits of working with an authorized partner. Getting to this first step is easy. Where do you take it? The sky is the limit. Giving your brand greater reach is not only lucrative in the short term, but also contributes to greater long-term trust from your audience. If your business moves from a small business to a company with greater visibility, your customer base will likely develop an even greater sense of loyalty because they know, after staying with you from the beginning, that your potential for global recognition is high. Licensing is the process of renting trademark or copyrighted properties for use in connection with a product, service or promotion. The property can be a name, image, logo, graphic, saying, signature, character, or a combination of several different elements. Licensing agreements entered into by Owners and Licensees have the potential to exploit strong brands with in-demand products that create real value for both parties. Businesses large and small make billions of dollars each year in licensed retail products. From “Toy Story” action figures to T-shirts with the Coca-Cola logo, the potential to use a brand to get a license or license for a popular brand is huge. A license agreement is a commercial agreement shared by two parties.

A licensor who owns the product or trademark; and the licensee who acquires the license with the intention of working with the existing product or trademark. Simply put, it is a contract that allows one company to use another company`s intellectual property. To understand a license agreement, you must first understand the terms used. Some of the most common terms in trademark licensing agreements are: Trademark licensing in Italy began in the seventies with very few licensing agencies. Apart from Disney, which had its own office in the market, all the other major entertainment majors were represented by independent agencies. One of these companies called DIC 2 (Distribution International Characters), founded in 1973 by Gianfranco Mari, helped build the licensing business in Italy and set up major phenomena such as He-Man and the Masters of the Universe, Marvel Comics, Star Wars, Hanna & Barbera characters, Zorro, Asterix and so on. .