The Brand Licensing Process - Step 5: Define Licensing Opportunity

1. The Brand Licensing Process Step 5 : Define Licensing Opportunity PETE CANALICHIO After completing the due diligence process, the size and scope of the actual license agreement are assessed. Design of the Products 1. The licensor will work with the selected candidate licensees to fully understand their strengths and determine whether the licensing opportunity is viable or not. 2. The outstanding candidate licensees will immerse themselves in the licensor’s brand so that they can fully understand its positioning and architecture. 3. From this, they should propose the look and feel of the products. Licensees will incorporate the brand attributes into the design of their products. Licensees will pay particular attention to the placement of the logo on the product, the material from which it is constructed and how the logo is affixed to the product. A sharp licensee will request that the licensor provide him with the brand’s style-guide so they have the required information to do this. In figure 1 is an Business Estimator which is used by the candidate licensees to develop three-year sales projections so they can assess the scope of the license. If you would like the nights to sell into retailers other than those listed, please name Estimated Wholesale Sales Year 1 Estimated Wholesale Sales Year 2 Estimated Wholesale Sales Year 3 Other targeted Accounts Targeted Sell- In Date Other targeted Accounts Total $0 $0 $0 Figure 1 - LBI Business Estimator Sales Projections 1. Simultaneously, the licensor requests that the candidate licensees develop three-year sales projections so they can assess the scope of the license. This forecast is a conservative estimate of the sales the licensee thinks he can achieve and is segmented by region, channel and Stock Keeping Units (SKUs). It also includes the number of new products the licensee thinks he will introduce each year. 2. The sales projections provided by each of the shortlisted licensees are compared. Are the proposals viable, achievable and do they maximize the brand opportunity? Once the sales projections have been vetted, the licensor uses these to rank the candidates. The size of sales targets are used in negotiating deal terms: minimum sales targets, guaranteed royalty minimums and cash advances. 3. With this, the groundwork for the actual contract is prepared. The licensees and the licensors then go into the next step. Grab V aluable Resources from Brand Licensing Experts for 100% Free Today Are you interested in extending your brand’s influence, strengthening consumer relationships, and generating unlimited revenue from guaranteed royalty payments? Get Your FREE Membership Today PeteCanalichio.com/fast-track PETE CANALICHIO