Licensing seems to have its own unique language. What are some of the key elements of a licensing agreement?
This is a question that is often asked. In Karen Raugust’s book, The Licensing Business Handbook, the following concise definitions were given: Advance: Part of the payment required for a license, usually due upon contract signing. Most often, it is a portion of the guarantee rather than an additional payment. Guarantee: A minimum royalty payment, usually based on expected sales. Actual royalty payments accrue against the guarantee amount: Whatever remains of the guarantee after total royalties are tallied is due at the end of the contract period. If royalties exceed the minimum guarantee, no further money is owed. Royalty: The basic form of payment in a licensing agreement; usually a percentage of the net sales price of each unit sold. Royalty Reporting: The act of providing licensors with accurate and detailed information on sales results and royalties due over a period of time. Licensing fee: 1) A flat fee required as payment for use of a license.
This is a question that is often asked. In Karen Raugust’s book, The Licensing Business Handbook, the following concise definitions were given: Advance: Part of the payment required for a license, usually due upon contract signing. Most often, it is a portion of the guarantee rather than an additional payment. Guarantee: A minimum royalty payment, usually based on expected sales. Actual royalty payments accrue against the guarantee amount: Whatever remains of the guarantee after total royalties are tallied is due at the end of the contract period. If royalties exceed the minimum guarantee, no further money is owed. Royalty: The basic form of payment in a licensing agreement; usually a percentage of the net sales price of each unit sold. Royalty Reporting: The act of providing licensors with accurate and detailed information on sales results and royalties due over a period of time. Licensing fee: 1) A flat fee required as payment for use of a license. An alternative to a royalty, genera
