1. Sign Here: Licensing for Profit

2. Licensing
An agreement allows one company to use the Trademarked property of another company to
manufacture and sell its own products.
Company that use the trademarked property pays a fee. It is a percentage of its profit to the other company.

3. What isn’t licensing Not a brand
Branded items don’t use another company’s trademark
Feature only logo of the manufacturer
Some company’s build a brand and do licensing
Give an example

4. What isn’t Licensing?
Not sponsorship
Endorsement

5. Licensors Hold the trademark property
Examples: Sports Leagues and Individual teams
College athletic departments
Player’s unions
Individual athletes

6. Why be Licensor? Profit: brings in enormous income
Example: Wimbledon makes $100 million annually in licensing revenue
Low risk
Free advertising
Brand building
Making it real for the fans
Market expansion
Control

7. How do they get paid?
Contracts vary however they include two basic elements of guarantees and royalties
Guarantee: fee paid up front to the Licensor
it is based on expected sales
Royalties: as percentage of the actual sales
Once the guarantee is paid off, they start receiving royalties
Usually anywhere from 5% to 15% of sales

8. Risks for Licensor Quality of official licensed merchandise
Can’t keep merchandise from discount stores
Poor quality at low price can hurt image

9. Licensees Company that wants to use the trademarked property.
Example: Nike, Adidas, McDonald’s
Clothing accounts for almost 60% of all licensed merchandise sales.