What Is A Licensing Agreement Business

In the case of a subsidiary license, the licensee could be allowed to authorize another entity to use the licensed work. For example, if you are a movie producer and you license a song, you may still need to get permission to allow another entity to use the section of your movie where the song is being read. Licensing comes with certain risks and disadvantages. The company may lose control over the production and marketing of its products in other countries. As a type of entry into the international market, licensing can also be less cost-effective than other decisions, as returns must be shared between two parties. There is even a risk that the foreign licensee will sell a similar competing product after the license agreement expires. Other risks and issues include the selection of a partner as well as any general uncertainty in managing business with an international partner, including language, culture, political risks and currency fluctuations. Alternatives to licensing include exporting, acquisitions, establishing a wholly-owned international subsidiary, franchising and forming strategic alliances. issued to a person to run a business using a common brand name, a common operational support system and the payment of initial and/or ongoing fees.

The licensing agreement gave Starbucks the opportunity to increase brand awareness outside of its North American operations through Nestlé`s distribution channels. For Nestlé, the company had access to Starbucks products and a strong brand image Brand equityIn marketing, brand equity refers to the value of a brand and is determined by the consumer`s perception of the brand. Brand value can be positive or positive. A license agreement is a written agreement between two parties in which one owner allows another party to use that property under certain parameters. A license agreement or license agreement typically includes a licensor and a licensee. Nevertheless, licensors must also defend themselves against the unauthorized use of their names and symbols. Especially when it comes to clothing, they have to deal with a vast domestic industry of unlicensed clothing manufacturers who use famous names and images to sell caps, t-shirts and the like, often at discounted prices on “official” products. In some cases, as was the case with Anheuser-Busch, it was out of defense against such abuses that companies first came up with the idea of licensing their names and logos. .

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