As we mentioned in our post titled “Market Volume, Growth and Drivers of Brand Licensing in Europe“, the brand licensing market in Europe has demonstrated consistent growth, driven by increasing consumer demand for branded products and strategic collaborations across various industries.
Brand licensing is a business arrangement in which a brand owner (licensor) allows another party (licensee) to use its brand name, logo, and related Intellectual Property such as trademarks, know-how and consumer segmentation, for specific products or services. In return, the licensee typically pays a royalty or fee, gaining the right to leverage the brand’s established reputation and customer base.
Brand licensing allows licensors to expand their brand presence and open additional revenue steams without direct production or marketing costs. Licensees, on the other hand, benefit from increased brand recognition and consumer trust, which can drive sales and differentiate their products in competitive markets.
Here are the main elements a Brand Licensing agreement should include:
- Scope of Use: Defining which products, services, or territories the licensee can use the brand for.
- Royalty or Payment Structure: Detailing how the licensee compensates the licensor.
- Quality Control: Ensuring products or services maintain brand standards.
- Duration and Renewal Terms: Specifying the license term and renewal process.
- Intellectual Property Protection: Outlining how the brand and its assets will be protected.