What is the average royalty, advance, and guarantee?
The answer is that it depends on a number of factors. As for royalty rates, they can range from as low as 1% to as much as 20%. The average ranges from 8% to 12% of the wholesale net price. As for the guarantee, we recommend that a guarantee relate in some way to realistic sales forecasts. There is nothing wrong with asking questions or even negotiating. Understandably, you will find that properties represented by large licensors or properties with a high demand are tougher to negotiate. GCI can help guide you through the process.
The answer is that it depends on a number of factors. As for royalty rates, they can range from as low as 1% to as much as 20%. The average ranges from 8% to 12% of the wholesale net price. As for the guarantee, we recommend that a guarantee relate in some way to realistic sales forecasts. There is nothing wrong with asking questions or even negotiating. Understandably, you will find that properties represented by large licensors or properties with a high demand are tougher to negotiate. GCI can help guide you through the process.
It is somewhat misleading to discuss an average payment for licensing deals, since they vary widely depending on a number of factors. While royalties are commonly in the 5%-14% bracket, they can be as low as 1% and as high as 20%. Increasingly, licensors and licensees are agreeing to a graduated royalty scale tied to performance or sales benchmarks. The majority of guarantees fall between $10,000 and $50,000, but they can range from as low as $1,000 (or less) to tens of millions of dollars. Advances also vary.
