Companies looking to “rent” a brand to use on their products by licensing are said to acquire a brand.
For the past two days, we’ve been discussing how this works.
For example, our company brokered an agreement between an iconic dark beer brand (guess which one?) and both Burt’s Chips and Holland’s Pies (for savory beer-flavored meat pies). Consumers know the brand and its flavor profile, so they will be more-likely to try these chips/crisps and meat pies because of that association.
Some companies attempt to acquire brands for licensing on their own. But often they find themselves in unfamiliar territory: the brand owner (or their agent) may ask for hefty advances, punishing guarantees, and even contributions to “media funds.” And the licensing contract with the brand owner may be long (50 pages and more), with tricky terms and definitions unfamiliar to most corporate counsels.
For example, who decides what the definition of “net sales” is? Are those sales what actually gets sold at wholesale (minus returns and write-offs), or the gross sales? And what happens if the brand gets sold? That’s not an uncommon occurrence these days, especially with restaurant brands. If the new brand owner doesn’t want to continue its licensing program or stops co-marketing efforts, what then?
Broad Street Licensing Group has been acquiring brands for licensing for BIC North America and other companies for years. Since we also represent major corporate brands for licensing, we understand how the process works from both ends. If you are looking to hire a brand acquisition specialist, here are 3 things to look for:
- How many different companies has the brand acquisition company worked for?
- What is their track record in negotiating contracts with reasonable financials and sufficient protection for the acquiring party?
- Can they do more than just identify brands and negotiate deals (i.e., can they manage your licensing business for you)?
Brand acquisition can help a company get on the fast track to greater sales and market share. Make sure you use the services of a qualified licensing specialist, and don’t try this at home!
Plan on stopping by our panel at the National Restaurant Show at Chicago’s McCormick Place Sunday, May 17th entitled “How to Make Retail & Alternate Distribution Channels Work for You.” Joining BSLG’s Bill Cross will retail guru, Jimmy Matorin, whose restaurant industry breakfast on Saturday, May 16th is celebrating its 20th anniversary. Rounding out the panel will be Abbie Westra, Editor in Chief of Convenience Store Products.