Restaurant Licensing: Product Extension Strategy Approach

Emily Wickerham Randles

May 27, 2020

We recently spoke with a leading casual dining restaurant chain about licensing their brand. They wanted three things: 

  1. Big deals 
  1. Product on shelf this year  
  1. Not to license rolls or any of their “signature products” 

I was really struggling with their third demand. Their buttery rolls and addicting cinnamon butter are signature items the restaurant is known for. Let’s break down their fears for licensing rolls and butter and then we will address how we would handle the other demands.  

Fears of Licensing Rolls & Other Signature Products  

  1. The restaurant chain is afraid that if we licensed their brand name into grocery store rolls, that consumers would pick up rolls at the store and not eat at their restaurant. They would, therefore, decrease their core business in exchange for only a small royalty percentage that they would earn from the sale of the grocery store branded rolls.  
  1. The restaurant chain is concerned that the grocery store rolls would not be as good as the rolls at the restaurant and disappoint their loyal customers.  
  1. The restaurant chain is worried about sharing the roll and butter recipe with outside third parties. This is after all one of the things that differentiates them from their competitors and why their customers come to their restaurants.  

These are all common fears for brands when considering brand licensing extensions.  

To address their first concern, we tried to explain consumer decision behavior. Think about your own decision making, when trying to decide what you are going to do for dinner. What is your first decision point? The decision making is typically tiered. Consumers usually decide what they are going to eat or if they are going to eat out or eat at home.  

Restaurant Licensing - Dinner Decision Flow Chart

The idea that consumers are walking through the grocery and decided to eat at home vs. going out because they can pick-up their favorite restaurant rolls at the supermarket is an improbable scenario. People don’t go to the restaurant chain just for the rolls, they go for the experience, for the rolls, the steak, the fun atmosphere, and friendly staff. They go because they don’t want to make dinner. 

However, if you are planning to make dinner at home and you are at the grocery store buying what you need, you definitely want your loyal customer’s to be able to pick-up their favorite restaurant rolls.  

Brands must see licensing extensions as providing their consumers with an additional way they can interact with their brand, instead of consumers choosing between interacting with their brand in the restaurant verses the consumers home 

A great example of this is the Red Lobster biscuits. Now, I don’t often go to Red Lobster as I am not big on seafood, but what I can tell you is that they have mouthwatering cheddar biscuits. The other day when I was shopping at the store, I noticed that you could purchase the Red Lobster biscuit mix and make Cheddar Biscuits at home. First of all, it got me thinking about Red Lobster when I typically don’t think of Red Lobster as a dinner option. Second, I was able to choose the Red Lobster biscuit mix instead of buying bread at the bakery. Not only did seeing the biscuit option at the store increase my probability of considering Red Lobster next time we want to eat out and want seafood, but it will likely also leave a strong and memorable impression with my dinner guests. 

Licensed Product Example Red Lobster Cheddar Bay Biscuits
Licensed by Continental Mills  

NPD data shows that people are eating at home 80 percent of the time, more frequently than the 75 percent ten years ago. Cost is one issue. Restaurant meal prices are increasing at 2.2 percent a year, faster than the rise in costs of a meal at home ( People aren’t eating at home because they can get your product at the grocery, they are eating at home because prices are high or it’s more convenient.  

Brands should want consumers to choose their brand if they are going to eat out and if they’re going to eat at home. If Brands aren’t offering consumers an at-home option, they risk that their brand isn’t staying top of mind. 

Quality Concerns 

The brand’s concern that the licensed product would not meet their quality standard is very common. After all a brand doesn’t want a bad experience from a licensed product to tarnish their relationship with customers. However, there are safeguards with licensing deals that can help ensure quality of the licensed product. The brand gets to review and approve all products. If they were to license rolls and butter they would be able to taste and request changes to the product if it didn’t meet their standards. The product would not go to production and be shipped to market without full approval from the brand. Additionally, ongoing quality checks are included as a requirement in the license agreement and we help clients ensure that those checks are completed as needed. If we do find an issue with quality, we make sure it is addressed immediately. Nothing is risk free, but we work with clients and licensees to make sure licensed products are top quality. Afterall, it doesn’t help the licensee if they are selling a non-performing product. Their goal is the same as the brands, to sell more rolls and butter to the loyal customers.  

Protecting Recipe IP 

When we spoke to the potential client about licensing their roles and butter, they were uneasy about sharing their proprietary roll recipe with an outside party. While this is a valid concern, there are ways we can protect the client’s IP and still license their brand into rolls. Contractually we can protect the client’s proprietary recipe from being copied by the licensee, or we could even structure the deal so that they don’t have to share the recipe with the licensee. One of the things we love most is the ability to structure deals creatively so that we establish the proverbial “win-win” scenario. 

Big Deals  

When it comes to the potential client wanting big deals, this was music to my ears. Our motto is Fewer, Bigger, Better deals. We work with clients to do the right deals that will extend their brand in meaningful ways and not just a bunch of little deals. However, for us to do BIG deals for this potential client, we would need to license their brand into the product categories they were known for, think rolls, steaks, and maybe steak sauces. For example, consumers aren’t going to buy the restaurant chain’s chicken breast or green beans if that’s not what they are known for. The product extensions need to have strong equity and connection with the brand. 

Product in the market this year! 

In terms of getting deals done fast, again, this goes back to licensing the right product categories. If there is high demand in the marketplace for the restaurant’s rolls, then yes, we can get a deal done fast and to retail quickly. However, if it’s for a product category that they are not known for, it will take more time for us to find a licensing partner. Additionally, it will take the licensing partner significantly more time to secure retail placement and generate royalty revenues. 

The COVID-19 Impact 

This post was originally drafted before the COVID-19 quarantine period had been implemented. Now that restaurants have closed their doors and are only offering carry-out, think how impactful it would be if the restaurant chain had licensed products at the grocery store. They could have stayed top-of-mind with consumers allowing them to continue to experience one of their favorite brands while stuck at home. It would have given them brand impressions that many brands are lacking because of quarantine, and it would have generated royalty revenue for the company while current restaurant revenue is down significantly. Additionally, it may have even enticed new potential customers to try their brand for the first time and therefore build a new customer base.  

Due to the effects of COVID-19, it is unlikely that eating out will go back to the way it was. The quarantine mandates have hit restaurants hard, and it is unknown what restaurants will survive and recover from the shutdown period. Offering at-home options through licensed products is an alternative Brands should consider and explore as it is likely that the eating at home trend will sustain well beyond the quarantine period. It may even be the only way a brand can survive in the future. Think of the closed Mexican restaurant chain Chi Chi’s. Chi Chi’s has closed for years, but you can still get Chi Chi’s salsa, chips, and seasoning packets. 

Restaurant extensions into grocery stores may be more relevant as we move forward with the changing landscape. However, regardless if the quarantine period lasts, staying top of mind with consumers will continue to serve restaurant Brands as they fight for dollar share of food sales.

IMC Licensing Logo Mark

Related Articles

  • The 3 Licensing Trends We’re Watching in 2021

    We saw many new product trends take flight in 2020, and they are here to stay in 2021 and beyond.…

    Julie Brown

    February 22, 2021

  • Opportunities in Gaming Licensing

    Recently on our podcast, we had an exciting conversation with Lauren Fields Conlon, VP of Licensing and Merchandising at Loaded…

    Emily Wickerham Randles

    January 27, 2021

  • The Next Level in Gaming Licensing | Lauren Fields Conlon, Loaded

    From Ninja to Shroud, the gaming industry’s top content creators are reaching new levels through licensing. On The Brand Licensing Podcast, we’re taking a…

    The Brand Licensing Podcast

    December 16, 2020

  • IMC Licensing’s 2020 Year in Review

    It’s easy to focus on all the craziness when looking back on 2020, but here at IMC, we honed-in on…

    IMC Licensing

    December 14, 2020

  • Debunking CPG Licensing Myths

    Debunking licensing myths is a familiar topic of conversation for the IMC team. From prospective client pitches to onboarding a…

    Julie Brown

    November 16, 2020

  • Is Your Brand Ready for Licensing?

    Licensing a brand can be a highly strategic tool for brand owners, so it’s no wonder many look to the…

    Julie Brown

    October 7, 2020

  • Why Do I Need a Licensing Agency?

    Using a licensing agency versus building a licensing program in-house is similar to a house project – you can take the DIY approach…

    Emily Wickerham Randles

    September 21, 2020

  • IMC Licensing Named Top 25 Global Licensing Agent

    IMC Licensing is thrilled to be recognized by License Global as a Top 25 Global Licensing Agent. On this year’s…

    IMC Licensing

    September 10, 2020

  • A Fresh Perspective on Licensing | Lauren DeLapa, IMC Licensing

    On the latest installment of The Brand Licensing Podcast, we’re sitting down with Lauren DeLapa from IMC Licensing. As an Associate Account Manager,…

    The Brand Licensing Podcast

    September 9, 2020

  • IMC’s Proven Deal Process

    Wading into the licensing pool can be pretty intimidating. On one hand, you think you should understand every aspect, but on…

    Emily Wickerham Randles

    August 19, 2020

  • Pet Licensing in the Pandemic | Steven Shweky, Fetch for Pets

    On the latest episode of The Brand Licensing Podcast, we’re sitting down with Steven Shweky, President of Fetch for Pets,…

    The Brand Licensing Podcast

    August 10, 2020

  • Why IMC Licensing?

    So, you’re looking for a licensing agency. Congrats! Jumping into licensing is an exciting endeavor, but now, you’re facing the…

    IMC Licensing

    July 23, 2020

  • IMC’s Program Management Services

    Once we’ve executed a thoughtful licensing strategy  and connected you with the perfect licensee via our  solicitation services, we don’t ghost. We’re in it…

    Julie Brown

    July 23, 2020

  • Restaurant Licensing: Product Extension Strategy Approach

    We recently spoke with a leading casual dining restaurant chain about licensing their brand. They wanted three things:  Big deals  Product on…

    Emily Wickerham Randles

    May 27, 2020

  • IMC’s Licensing Solicitation Services

    So, you’re looking to jump into licensing solicitation and start your search for potential partners. Where do you begin? This is where we come into the picture! At…

    Julie Brown

    May 19, 2020

  • IMC’s Strategy Services

    As experts in brand licensing, IMC offers three core services: strategy, partner solicitation, and program management. If you’re also an…

    Julie Brown

    April 22, 2020

  • Are you a Good Licensor? – Tips to Maximize your Partnership with Licensees

    As a licensor, you have high expectations of your licensees. And you should! You manage a leading brand and business…

    Julie Brown

    March 31, 2020

  • Brand Licensing vs. Patent Licensing – How to launch a new product through Licensing

    We get several calls from start-up companies and entrepreneurs about utilizing licensing to launch their product. The conversation usually goes…

    Emily Wickerham Randles

    January 28, 2020

  • Don’t make this common mistake with your license agreement

    It’s fairly common, a licensee’s legal or executive team negotiates and signs the licensing agreement and then hands the reigns…

    Julie Brown

    May 1, 2019

  • Mitigating Risk – Brand Licensing

    Some consider licensing out their brand very risky, while others would argue that licensing out their brand is a low-risk…

    Emily Wickerham Randles

    February 14, 2019

  • Donald Trump: How a Presidential Campaign Helps (and Maybe Hurts) a Licensed Brand

    As election year 2016 rolls on, and Donald Trump the presidential candidate delivers a new surprise every day, it’s worth…

    Stephen Reily

    July 11, 2016

  • It’s Cool To Be Healthy: How Marketing Saved Wellness’ Business Model

    Is cheesecake the new tobacco?  That’s a question asked that has highlighted both good news –the New York Times last week, Americans Are…

    IMC Licensing

    August 5, 2015

  • 4 Reasons Why Licensing Needs Digital Marketing

    Five years ago many of our licensing clients (global CPG brands among them) weren’t even using digital marketing and social…

    Stephen Reily

    June 26, 2015

  • Stories Beat Data: And Other Marketing Insights from Cannes Lions 2015

    For all the lessons technology teaches us, did you ever feel like it also ignores some of the most important…

    Stephen Reily

    June 26, 2015

  • 3 Proven Ways to Save Your Brand from the Brink

    FastCompany’s recent story “The Biggest Business Comebacks of the Past 20 Years” shared the stories of brands and companies that had returned…

    Stephen Reily

    May 6, 2015

  • Earned Social Media = Earned Consumer Trust

    Brands are constantly seeking the loyal consumer. Not the one who buys occasionally, but the one who follows through on…

    Emily Wickerham Randles

    April 24, 2015

  • Four Things Great Partners Do

    Batman and Robin. Brin and Page. Ben & Jerry. Some business partnerships are so great that they appear to happen…

    IMC Licensing

    January 13, 2015

  • Rethinking the 4 P’s for a Digital World

    Since Jerome McCarthy laid out the Four P’s in 1962, we’ve been able to take for granted that a successful…

    IMC Licensing

    December 8, 2014

  • The rise of consumer as chief storyteller – and brands’ new supporting role

    The beginning of the end of storytelling, announced David’s Berkowitz’ piece in Ad Age last week. The end of storytelling? The…

    IMC Licensing

    September 25, 2014

  • Keeping Your Options Open in Licensing

    Licensors with iconic brands often have to make tough choices about extending their brands in new markets through licensing versus…

    IMC Licensing

    November 4, 2013

  • Why Does Licensing Love the Holidays?

    In the licensing world, most royalty payments are made on a quarterly basis. Any licensing professional can immediately tell you…

    IMC Licensing

    December 20, 2012


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.