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25 Brand Licensing Key Business Terms

25 Brand Licensing Key Business Terms

25 Brand Licensing Key Business Terms

 

 

Welcome to our guide on brand licensing!

If you’re new to this concept, don’t worry – we’ll break down some key terms and definitions for you. And if you’re familiar with brand licensing, consider this a refresher course.

 

 

 

  1. Brand Licensing: The process by which a brand owner extends its intellectual property (IP) to a third party, allowing them to create products or services under the brand’s name.

     

  2. Licensor: The owner of the brand, character, or trademark who grants the license to a third party.

     

  3. Licensee: The third party who acquires the rights to use the brand, character, or trademark in the production and sale of goods or services.

     

  4. Royalty Fee: A payment made by the licensee to the licensor for the use of the licensed property, usually calculated as a percentage of sales.

     

  5. Trademark: A symbol, word, or words legally registered or established by use as representing a company or product.

     

  6. Intellectual Property (IP): Creations of the mind, such as inventions; literary and artistic works; and symbols, names, and images used in commerce.

     

  7. Copyright: A legal right that grants the creator of an original work exclusive rights to its use and distribution, usually for a limited time.

     

  8. Brand Equity: The value a brand adds to a product or service, reflected in how consumers think, feel, and act with respect to the brand.

     

  9. Co-Branding: A marketing partnership between at least two different brands of goods or services.

     

  10. Exclusivity: A licensing agreement term in which the licensor restricts the license to only one licensee, typically within a specific geographic area or product category.

     

  11. Territory: The geographic area in which the licensee is authorized to produce or sell the licensed products.

     

  12. Product Category: Specific classifications of products or services to which the license applies.

     

  13. Sub-Licensing: When a licensee grants some or all of their licensed rights to another party.

     

  14. Brand Extension: Expanding the brand to new products, categories, or markets beyond its current product lines or services.

     

  15. Minimum Guarantee: The minimum amount the licensee agrees to pay the licensor regardless of sales.

     

  16. Royalty Audit: An examination of the licensee’s sales records to ensure accurate royalty payments.

     

  17. Style Guide: A set of standards and guidelines provided by the licensor for the appropriate use of their brand, including logos, colors, fonts, and other branding elements.

     

  18. Merchandising Rights: The rights licensed that allow the licensee to produce and sell merchandise based on the licensor’s property.

     

  19. Cross-Merchandising: A retail practice where licensees market products related to their licensed products to drive sales of both.

     

  20. Renewal Option: A clause in a licensing agreement that allows the licensee to continue the agreement after the initial term has ended.

     

  21. Infringement: The violation of the licensed rights, such as producing unapproved products or selling in unauthorized territories.

     

  22. Advance: An upfront payment made by the licensee to the licensor, often applied against future royalties.

     

  23. Distribution Rights: The rights granted to licensees to sell a product in particular channels or retailers.

     

  24. Licensing Agent: An intermediary who facilitates the licensing agreement between a licensor and licensee, often for a commission or fee.

     

  25. Brand Valuation: The process of estimating the total financial value of a brand.

     

 

 

 

These terms provide a fundamental understanding of the intricacies involved in brand licensing, a common practice used to expand brand reach and generate revenue.

 

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