Sage-Tips

What are brand royalties?

Brand royalty rates are payments made from a licensee to a licensor in exchange for the use of their brand assets. They are usually a percentage of the revenue generated by the licensee’s use of the brand. Royalty rates make sure that both parties benefit fairly from the license agreement.

What is licensing for a brand?

The definition of brand licensing is the process of leasing a trademarked or copyrighted property for use in connection with a product, service, or promotion.

What is a brand agreement?

A licensor, who owns the product or brand; and the licensee, who purchases the license with the intent to work with the existing product or brand. Simply put, it is a contract that allows one company to use another company’s intellectual property.

What is the purpose of brand licensing?

Brand licensing is a way for brand owners to increase their current fan base and move into new businesses categories without major investment in new manufacturing processes. It allows retailers and manufacturers to stand out from the competition and offer consumers the hottest brands as well as drive sales.

What is a fair royalty percentage?

In public finance, the 25\% rule prescribes that a public entity’s total debt should not exceed one-quarter of its annual budget. In intellectual property, the 25\% rule suggests the reasonable royalty that a license should pay an intellectual property holder on profits.

What is an appropriate royalty rate?

Depending on the circumstances, as a general benchmark subject to fact-specific adjustment, an amount equal to approximately 25\% of the Licensee’s operating profit derived from the sale of licensed products often is viewed as an appropriate royalty payment where the Licensor provides the Licensee with significant value …

What are the three P’s of licensing?

protection, promotion, and profit
The 3 P’s of collegiate licensing are protection, promotion, and profit.

Can a brand be licensed?

An arrangement to license a brand requires a licensing agreement. A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor).

How does a brand licensing agreement work?

The brand license definition is a licensing agreement that gives permission to a company to produce or market a product or service from the original owner. The licensee will then produce, promote, and distribute the product or service and, in exchange, the licensor will get royalties from the sale.

How do you structure a licensing agreement?

The steps for making a license agreement are as follows:

1. Download a template for a licensing agreement.
2. Choose your role as the licensor or licensee.
3. Define the license(s) in the agreement.
4. Decide whether the license is exclusive or not.
5. Settle the matter of fees and payment schedule.
6. Add a renewal date and rules.

What is a good royalty rate?

Royalty rates vary per industry, but a good rule of thumb is between 2-3\% on the low end, and 7-10\% on the high end. I have licensed consumer products for as low as 3\% and as high as 7\%, with 5\% being the most common and a generally fair number.

What is brandbrand licensing?

Brand licensing refers to a brand’s leasing to a business other than the owner of a company. For instance, a beer company that’s based in Europe can license its name to an American brewing company. The main reason why companies can choose to brand products or items is to separate themselves from competitors.

What are some good examples of brand licensing agencies?

A good example of a brand licensing agency is my company iQ License, which has a number of represented brands (Christian Siriano, J.R. Watkins, among others), and connects brands and manufacturers on an online platform.

Why do companies license their products?

The glamour and appeal of products licensed to hit movies, TV shows, sports events, celebrities, famous characters and even fashion brands make them eminently suitable for products across verticals and regions.” From major corporations to small businesses, licensing is also widely used as a marketing and brand extension tool.

What is a “licensable product”?

That really can’t be a useful way to attempt to define a term for a bunch of engineers, scientists and mechanically or electrically inclined inventors, many of use who are grammatically challenged. Obviously, in very broad general terms, a “licensable product” is one that can be licensed.