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What Is Licensing?
Licensing in its simplest form enables companies to use recognisable imagery on their products to help increase their consumer appeal. It provides them with a unique selling point or distinct point of difference. The imagery could be from films, TV shows, sports events, old archived imagery of advertising posters and campaigns and logos of iconic companies.
For companies to be able to use the imagery or Intellectual Property (IP) they must have a license to do so, therefore there would need to be a contract in place between the Licensor (IP owner) and the Licensee (manufacturer).
In most circumstances the Licensor would outsource the licensing programme to a Licensing Agent, allowing them time to concentrate on their company’s core offering. It would be the Licensing Agent's job to negotiate the terms of the contract. This would include the Royalty Rate, expressed as a percentage of the wholesale price. The Advance, normally based on projected income confirms the licensee’s commitment, which is not refundable. The Guarantee is the minimum amount payable by the Licensee and is advanced against the royalty payments.
Licenses are normally granted on a non-exclusive basis and contracts can be granted in different territories and a typical term is normally 3 years.
The Licensing Agent’s duties are much more than just negotiating the terms of the contract. Below is a summary of the common day-to-day functions.
Our main services
- Consultation to help Brand owners create a marketing strategy to ensure they are able to release their Brand’s potential
- Identify and evaluate appropriate licensees and retailers
- Negotiate contracts
- Assistance with the approval process
- Manage the ongoing relationship with licensees to control the longevity and image of the Brand
- Collect and distribute global royalty payments
- Provide quarterly financial reports and management information