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Licensee Benefits

Typical Benefits of Becoming a Licensee of a Well-Known Brand Name:

Distribution Fast and efficient active entry and penetration into thousands of retail facilities domestically and, perhaps, throughout the world. Economy of Introduction The cost and uncertainties related to the development of a new trademark are eliminated through an established brand name; the royalty cost of a licensed name is profitably recaptured through incremental sales increases and higher operating efficiency. Utilization of existing personnel as a starting base. Immediate operating results.

Benefits to Licensee’s Existing Activities Success as a licensee will enhance the image and reputation of the licensee’s other product lines. Increased volume permits greater economies in manufacturing and marketing. Establishes value (fair market value) attributable to the Licensing Program. Facilitates financing Creates marketability of the Licensing Program and/or the entire business. Support Services Licensor, or its licensing consultants, offer assistance in merchandising, marketing, consumer research, publicity and new product development.

Typical Incremental Financial Effects of Selling Licensed Products on Licensee’s Normal Operations:

Operating Classifications
Effects upon Operations

 

Sales

  • 50% to 100% incread in the overal sales, for the nearterm; further increases in sales should materialize in the long-term
  • Potentials and stability of sales of licensed products may be used to replace existing sales of proprietary and otyer licensed products
  • Conducive to enlarging the customer base
  • Less sales competition; greater spontaneous sales

 

Gross Profit

  • 25% tp 40% increase in gross profit percentage margins
  • Increased gross profit dollars readily exceed royalty costs
Operating Expenses
  • Fixed expenses remain relatively stable despite increased sales and gross profits
  • Variable expenses will change in moderate proportions to added sales
Income
  • Greater income is an end product of licensing
  • Licensing delivers greater intangible satisfaction from operating a business