An example of a licensing agreement in the restaurant industry would be that a McDonald`s franchisee has a licensing agreement with McDonald`s Corporation that allows them to use the company`s branded and marketing materials. And toy manufacturers regularly sign licensing agreements with movie studios and give them the legal authority to produce action characters based on popular similarities of movie characters. The issue of compensation is particularly important. Based on the ownership discussed in the license agreement, different payment models may be useful. The use of songs is usually offset by royalties, for example. In other words, the owner of the copyright to a song is paid for each time the song is played on the radio, in a bar or even by another group at a live event. Other models may be a flat fee or even a rate per year/month/week. Because of the legal basis they have to cover, some licensing agreements are quite lengthy and documents complex. But most of these agreements cover the same fundamentals. These include the scope of the agreement, including restrictions on exclusivity or territories; financial aspects, such as necessary advances, royalties and royalty calculations; Guarantees for minimum sales Calendars with “on-the-market” dates, contract duration and renewal options; the lessor`s rights to quality monitoring and control, including procedures to follow; Minimum inventories that need to be maintained and returns and allowances. Intellectual property licensing agreements are the most common, such as patents, trademarks and copyrighted material.

Music, film, video and works of art are the main copyrighted materials. Although a licensing agreement does not give you ownership of another entity, you can use it as long as you follow the parameters described in the agreement. 5.1 Neither the licensee nor the authorized user can, unless authorized by the publisher`s written permission or by a separate agreement signed by both parties: to protect yourself and your business, it is important to exercise rigour when establishing a licensing agreement. Both the licensee and the licensee must fully understand what they accept. Before the initial information, consider the following advice: The licensing agreement gave Starbucks the opportunity to promote brand awareness outside of the North American operations through Nestlé`s distribution networks.