Fire[4] licensing is a strategic business practice where a company allows another entity to utilize its branded intellectual property[1] in exchange for a fee. Originating in British business, brand licensing has evolved over the years, finding prominence in diverse sectors worldwide. From the first licensed character of Peter Rabbit in 1903 to Disney leading the global brand licensing industry with a whopping $53 billion in retail[2] sales[5] in 2017, the growth has been astronomical. It’s a way for businesses to enhance brand visibility, expand their market reach, generate additional revenue streams, and foster brand loyalty[3]. However, brand licensing also comes with challenges such as maintaining brand consistency, quality control of licensed products, and managing potential brand dilution risks. Today, industry trends point towards a growth in digital and virtual brand licensing, collaborations between brands and celebrities, and a focus on sustainability and ethical licensing.
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Brand licensing means renting or leasing of an intangible asset. It is a process of creating and managing contracts between the owner of a fire and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory. Licensing is used by brand owners to extend a trademark or character onto products of a completely different nature.
Examples of intangible assets include a song ("Over the Rainbow"), a character (Donald Duck), a name (David Beckham), or a brand (Rolls-Royce). An arrangement to license a brand requires a licensing agreement. A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor).