Joshua Julien Brouard
23 August 2023 • 3 min read
Times have become tough. Businesses are increasingly looking for new ways to increase profitability and improve the sustainability of their business.
One such way is corporate licensing.
Definition: Corporate licensing occurs when a business licenses itself to other prospective business owners, known as licensees. They'll own and operate a separate branch of the company under the same brand and offer the same goods and services.
So, while there are quite a few benefits of corporate licensing for your business venture, there are also several downsides to look out for. In this article, we're going to explore this. We'll also assess how licensing agreements impact your trademark rights.
Let's begin:
The benefits of a licensing agreement are numerous. They include but aren't limited to:
So while there are positives, like with anything, risks are involved. These include but aren't limited to:
A licensing agreement can affect trademark rights differently. This depends on the contract's terms, conditions, and licensing requirements. Some things to consider include:
Licensing agreements offer a way forward for businesses to (1) expand their reputation, (2) earn passive income, and (3) grow their reach nationally and internationally. Just make sure to set out clear stipulations in the agreement, or you risk damaging your brand's reputation.
How licensing affects a trademark will depend on the agreement signed. For example, the contract should stipulate how the licensee can use the trademark and if there are any limitations.
As the licensor, you'll receive royalty payments for the licensee's use of your trademark. However, you do risk your own reputation. This is why quality control is so vital in licensing agreements.
Smaller manufacturers have an excellent opportunity to enter into international markets through licensing agreements. In addition, they don't even need to conduct market research as the licensee would already understand the market well.
AUTHOR
Joshua J. Brouard has a diverse background. He has studied bachelor of commerce with a major in law, completed SEO and digital marketing certifications, and has years of experience in content marketing. Skilled in a wide range of topics, he's a versatile and knowledgeable writer.
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