- Go over what licensing is first, then licensing agreements.

- In a well-run licensing program, the property owner maintains control over the
brand image and how it s portrayed(via the approvals process and other contractua
l strictures), but eventually reaps the benefits in additional revenue(royalties
) but also in exposure in new channels or store aisles.
- Agreements include a scope of issues such as exclusivity or territorial restri
ctions, financial aspects(including required advances), royalty rates(and how th
ey re calculated), guarantees of minimum sales, time schedules involving to market d
ates, length of contract, and renewal options; the lessor s rights of monitoring a
nd quality control, including procedures to be followed; minimum inventories req
uired to be maintained; finally, returns and allowances, and so forth.
- Not all licensors require guarantees, in some cases, licensors use guarantees
as the basis for renewing a licensing agreement. If the licensee meets the minim
um sales figures, the contract is renewed; otherwise, the licensor has the optio
n of discontinuing the relationship.
- Another important aspect of the agreement establishes time frame of the deal a
nd insist upon a strict market release date for products licensed to outside man
ufacturers.
- The licensing agreement will also include provisions about the length of the c
ontract, renewal options, and termination conditions.
- Get NDA(non-disclosure agreement signed)
- Most licensing agreements also address the issue of quality. For example, the
licensor may insert conditions in the contract requiring the licensee to provide
prototypes of the product, mockups of the packaging, and even occasional sample
s throughout the term of the contract. Another common quality-related provision
in licensing agreements involves the method for disposal of unsold merchandise.
If items remaining in inventory are sold as cheap knockoffs, it can hurt the Rep
utation of the licensor in the marketplace.
- Sometimes licensees insert their own clauses into agreements, for example, a c
lause prohibiting the licensor from competing directly with the licensed propert
y in certain markets.
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