Debunking Corporate Brand Licensing Myths

Julie Brown

August 17, 2023

Debunking licensing myths is a familiar topic of conversation for the IMC team. From prospective client pitches to onboarding a client’s new team members, we have heard it all when it comes to myths about licensing a corporate brand. And although we can empathize with the concerns, licensing can be a highly strategic brand-building tool when done correctly. So, let’s debunk!


Myth one: “Licensing is too risky. I cannot give another party control of my brand”

You are not giving control of your brand to a licensing partner if you have appropriate processes and contracts in place. 

Build processes around product quality and licensor product approval rights. Product quality processes should include manufacturing audits, review of technical testing results such as product performance, visual branding elements, and quality control sampling. As a licensor, you should have final approval rights before products are shipped. 

Once the processes are set, incorporate them into the template licensing agreement for all partnerships. Most licensing agreements define specific product categories, distribution channels, and territory rights, along with product quality procedures, approval rights for branding elements, and licensor indemnification. You can always work with your agent or legal team to address specific concerns within the agreement. 

Lastly, to this point, relationships are key. You should be looking for licensing partners who are experts in their categories and whose company values align with yours. 

MYTH two: “Licensing is too resource intensive for my team”

Like anything worth pursuing, licensing takes an investment of time and resources to realize its full potential… but not much on the part of the licensor (and that’s the beauty of it). Consider your company’s internal processes to commercialize a new product concept. Think of all the product testing trials and costs that go into that piece of the process alone. Now consider licensing, where all of those costs plus responsibility for manufacturing, distribution, and marketing are the licensees’ burden and the royalty return goes straight to your bottom line!

If you are serious about building a meaningful licensing program, consider hiring an agent. Agents set up processes, solicit new licensees, negotiate contracts, oversee product development processes, and can manage ongoing licensee communication on your behalf, with minimal resources required of the licensor.  

MYTH three: “Potential licensing revenue is insignificant.”

You are managing a hundred million dollar plus brand and don’t want to be distracted by licensing, at only a fraction of the revenue stream. We get it. But building a solid foundation for licensing and then adding key stretch programs over time can add up to a significant revenue stream and a source of diversification for your business. At IMC, we believe corporate brand licensing is a long-term tool that can pay off significantly in later years if built properly. The first year or two are growth years, but returns will pay off with mature programs in years 3-5 and beyond.

Licensing revenue also goes straight to your bottom line, without investment costs such as R&D. Think of what you could do with even a half-million dollars annually – could it cover a headcount or a few, or contribute to customer marketing initiatives? Then think about how those programs could grow into a multi-million dollar portfolio. 

Also, consider that licensing programs can contribute to your share credit and deliver incremental brand impressions throughout your primary distribution channels as well as alternative channels where you are not currently selling products. Take one of our clients, Sweet Baby Ray’s, the number one barbeque sauce in the U.S. They utilized licensing to extend their brand into beef jerky, which generated brand impressions in new distribution channels they’ve never been featured in before.  Febreze is another great example of extending its brand across adjacent scent categories with licensed products in the carpet care, vacuum and filter, laundry, candle, trash bag, and pet categories. 

Moving Beyond Brand Licensing Myths

After debunking these common misconceptions, you’ll see that licensing isn’t as intimidating as it may seem. Now that you’re ready to bust these licensing myths, what’s next?

Consider reaching out to a product and brand licensing agent who can properly advise you in setting up a licensing program for your brand. IMC could be the right fit! Contact us, and let’s talk.  

IMC Licensing Logo Mark

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  • National Brands, Private Label and Licensing

    During a panel discussion about product innovation at the 2009 Grocery Manufacturers Association’s Merchandising, Sales and Marketing Conference, one participant…

    IMC Licensing

    April 15, 2010

  • Brand Licensing 101

    As a brand and product licensing agency that develops and manages licensing programs for our clients’ trademarks and brands, we…

    IMC Licensing

    November 8, 2009

  • Retail Strategies Beyond the Top 10

    Every day the list of victims of the faltering economy grows longer.  Circuit City (#32 on National Retail Federation’s, Top…

    IMC Licensing

    September 25, 2009

  • Beyond Royalty Revenue: Measuring ROI from Licensing

    In recent surveys senior marketing professionals say that accountability for marketing services is more important than ever, and that they…

    Stephen Reily

    September 16, 2009

  • Trends in Inbound Licensing

    In the licensing industry, attention is typically focused on strategies to license a brand “out,” extending a brand into new…

    IMC Licensing

    August 19, 2008

  • The Brand Licensing Professional – Not One Size Fits All

    I cannot count the number of times I have heard companies talk about whether they should hire a “licensing professional”…

    Stephen Reily

    February 19, 2008

  • Licensing Agency Compensation: The Inside Story

    One of the needless mysteries of the licensing industry is the topic of agency compensation.  Although talented professionals neither gain…

    Stephen Reily

    February 19, 2007

  • The Bankruptcy Clause in a Licensing Agreement: Comforting but Useless

    An experienced reader of license agreements would know exactly where to find what I call the “bankruptcy clause” (about three…

    Stephen Reily

    March 1, 2003

  • When Trademark Licensing looks like Franchising: Avoiding Legal Risk

    If anyone doubted that trademark licensing has become an essential part of brand management, the recent Annual Meeting of the International…

    Stephen Reily

    September 8, 2002

  • The Risks a Licensor Poses to a Licensee: How Can They Be Limited?

    Most form license agreements assume that licensees pose greater threats to licensors than the other way around.  Aside from the…

    Stephen Reily

    August 8, 2002

  • Licensing to Preserve Trademark Ownership

    As all IP counsel know, registration of a trademark depends on that trademark’s use.  A trademark cannot be reserved indefinitely…

    Stephen Reily

    July 9, 2002

  • Trademarks Around the Edges

    Many years ago, companies that made a branded consumer product thought they did only one thing: make that product.  Their…

    Stephen Reily

    March 9, 2002

  • Watch What the Licensor Does, Not What it Says

    Hiring the best trademark counsel – and getting them to draft the best possible license agreement – will not alone…

    Stephen Reily

    March 9, 2002

  • How Accountants Will Change the Face of Trademark Licensing

    As the licensing industry frets about whether the biggest event of the year will be the performance of Harry Potter…

    Stephen Reily

    November 9, 2001

  • License Agreements: Partnerships Worth Getting Right

    Whenever you see a licensor and licensee in litigation with each other you should assume that something has gone wrong…

    Stephen Reily

    September 9, 2001

  • How Many People Does it take to Screw in a Trademark Licensing Agreement

    Because so many brand owners fail to appreciate how important licensing can be for their brand, many of those who…

    Stephen Reily

    August 9, 2001

  • Developing Branded Consumer Products like Consumer Products

    Last month I described how companies find themselves distributing or authorizing branded products that either weaken the protection of their…

    Stephen Reily

    July 14, 2001

  • Why Most Companies Have Too Many Licensors

    If you looked to a corporation’s internal licensing department for evidence of trademark usage and enforcement, as well as development…

    Stephen Reily

    May 20, 2001

  • Licensing Corporate Brands and Trademarks: Knowing What it Should Cost

    As someone who runs a licensing agency for the owners of brands and trademarks, I can be expected to argue…

    Stephen Reily

    February 19, 2001

Services

Licensing is a relationship not merely between brands, but among people. At IMC, we build and nurture both of those relationships while delivering top-notch customer care that treats — and protects — your brand as if it were our own.

About Us

We’re committed to fostering dynamic brand alliances. Often those alliances are born from one brand’s need and another’s ability to meet that need. The IMC team are experts at recognizing and creating those opportunities, but our real expertise is people. Standing side by side, as consultants, partners, peers, and as friends, we’re driven by a singular purpose: creating a smart idea.