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Financial Accounting: Applied Frameworks
Brand Licensing Models
The practice of a brand owner (licensor) renting their brand's name or logo to a manufacturer (licensee) in exchange for a royalty fee. ✨
Article Points:
1
A strategic way to enter new markets and generate revenue with low upfront investment.
2
The licensor gets royalties; the licensee gets instant brand recognition.
3
Common models include character, corporate, fashion, and sports licensing.
4
The biggest risk for the brand owner is brand dilution from low-quality products.
5
The licensee bears the manufacturing and inventory risk.
6
Success depends on a strong partnership and strict quality control.
7
Royalty rates typically range from 3% to 12% of wholesale revenue.
Source:
Brand Licensing Models
Brand Licensing Models
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Source:
Brand Licensing Models
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