License Branding – Tips on Licensing a Brand
License branding can be a worthwhile way to increase your share of the global marketplace. When you have a product or a service that is very successful in one geographic location, it can be tempting to think of the money you could make by marketing it worldwide. But just because it sells like hotcakes in the US doesn’t mean that the Japanese market would like it and this is the problem. Venturing into foreign markets is an expensive business. Not only do you need people who know the marketplace and the local custom i.e. what is normal business practice in the USA may be highly insulting to business people in Japan and vice versa. You also need people who understand the legal obligations for your product in that particular location as they may be different rules to those that exist in the USA.
So how do you research potential global markets without going out of business due to lack of funding? You could consider license branding. This will allow you to let someone else take the risk of marketing your product or service in another location or niche market. Yes you give them access to your product but only for a limited time period under very strict written contractual agreement. This agreement should be drawn up by attorney’s expert in the Law of the location where the license is going to be used. If the venture proves successful you have the choice of extending the license agreement assuming the licensee agrees or you can take back your property and market it yourself. In the meantime you will receive whatever remuneration you have agreed under contract.
If the venture is a complete failure you haven’t lost thousands of dollars in costs and time employing staff, sorting out marketing ventures, production centers and stores etc. You should still receive a basic amount for awarding the licensing brand to the licensee. At the end of the contract you can walk away from the experience relatively unscathed.
There are many different types of license branding available and the best one for you can only be decided after consulting with legal experts in this field who are knowledgeable about the laws of the country you are looking to go too as well as the country you are resident in. You should always be sure that you understand fully the terms of any agreement you sign. The financial consequences of making a mistake are too onerous to contemplate. Hence why you use an attorney – you have someone else to sue if it all goes wrong.
There are various ways to educate yourself on the ins and outs of licensing and it is well worth studying the facts before you venture into this potentially lucrative but complicated marketplace. You can attend specialized road shows and trade events but it would also be wise to undertake a home study course as well to maximize the return you get from the time you invest into evaluating licensing opportunities at home and abroad.