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Now that you’ve determined what categories you want to extend into via licensing, you’re ready to draft the licensees. Ideally you should have selected 2-3 prospective licensees to partner with. You’re now ready to assess the program scope from a sales, royalties and product perspective.Join Pete Canalichio as he takes you through step 5 (Defining the Licensing Opportunity) of the 8-step process. This stage includes a review of sales projections and product concepts from each of the prospective licensees and highlights of areas to watch out for. Throughout this webinar, Pete will be introducing different licensing terms such as royalty rate, minimum guaranteed royalty payments and commercialization date. Understanding these terms is critical to the next stage – negotiating a contract - so you will want to be sure to attend this session.The fourth of a 6-part webinar series, this webinar will help you understand the licensing opportunity presented by each of your prospects.To purchase the complete webinar series visit www.BrandLicensingExpert.com
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Getting Ready For The Draft
Pete CanalichioLicensing Brands, Inc.December 15, 2010
www.brandlicensingexpert.com
The following slides are an abridged section from our webinar series “How to Build Your Brand Licensing Dynasty”
To purchase the complete webinar and series with audio visit www.BrandLicensingExpert.com
Agenda
• Defining the Opportunity• Licensee Application Revisited• The Conservative Business Estimator• Common Deal Terms and Definitions• Product Concept Review• Rubbermaid Case Study – Sizing Up Candidate
Licensees• Follow Up Activities• Summarizing the Process
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Our Brand Licensing Process
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Step 2: Determine
How to Win
Step 3: Prospect Licensees
Step 8: Establish
Business Plan
Step 7: Conduct
Orientation
Step 6: Negotiate Contract
Step 5: Define Licensing
Opportunity
Step 4: Perform Due
Diligence
Step 1: Identify Where to Play
3
The Conservative Business Estimator
• Licensees selected after due diligence are asked to fill out the Conservative Business Estimator
• This is a 3-year sales forecast− By region− By channel and retailer− By SKUs− Annual product introductions
• Sales projections and viability are compared across licensee candidates
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Deal Terms
• Information from the application and conservative business estimator are used to develop deal terms
• Deal terms ultimately form the basis of the license agreement
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Common Deal Terms & Definitions
• Trademarks− The trademarks specified in the agreement that the
licensee is allowed to use on the covered products
• Covered Products− The products specified in the agreement that will be sold
by the Licensee that bear the trademarks of the Licensor
• Authorized Channels− The channels of distribution in which the Covered Products
may be sold as set forth in the agreement
• Territory− The region(s) or country(s) identified in the agreement
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Common Deal Terms & Definitions
• Term− The period the agreement shall be in effect with a
beginning and ending date
• Exclusivity− Ensures that the manufacturer will be the only licensee for
the licensor’s brands in the category of Covered Products specified in the agreement
• Royalty Rate− The percentage of Net Sales to be paid by the licensee to
the licensor
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Common Deal Terms & Definitions
• Advance− The amount of royalty payable by the licensee to the
licensor as installments credited against the minimum guarantees
• Minimum Guarantees− The minimum amount of royalties payable by the licensee
to the licensor with respect to the sale and distribution of Licensed Products
• New Product Introductions− Often required by the licensor on an annual basis to
ensure the licensee is sufficiently investing in R&D and the Covered Products sold remain relevant and desirable
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Common Deal Terms & Definitions
• Sales Performance Requirements− The minimum sales the licensee must achieve each year of
the licensing agreement
• Shipping Date− The date by which the Licensee must first ship Licensed
Products to the retailers for sale by the retailers
• Commercialization Date− The date by which the licensee must have placement of
their Licensed Products in each of the Authorized Channels in their contract
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Summarizing the Process
• Licensing Team / Agent
• Use information from licensee application and conservative business estimator
Determine Deal Terms
• Licensing Team / Agent
• Input from Marketing, Product Development, Legal, Operations
Review Product Concepts
• Licensing Team / Agent and Legal
• Decide licensees to move forward with and draft contract
Draft Contract
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This has been a snippet from our webinar series “How to Build Your Brand Licensing Dynasty” To purchase the complete series with audio
visit www.BrandLicensingExpert.com
