Licensing your business brand

Licensing a brand allows another business to use defined rights while ownership remains with the licensor. The agreement should match the commercial arrangement and identify the exact marks or other assets covered. A general permission to use our brand can leave important uses and controls unclear.

Define approved products, territory, channels and quality requirements. Consider who approves marketing, monitors compliance and deals with complaints or infringement. Check the relationship between the licence and any supply, franchise or distribution agreement so that expiry and remedies do not conflict.

Identify every asset included in the brand permission

List registered marks by number and representation, along with unregistered artwork, packaging or other material intended for use. A phrase such as our complete brand package would not identify legal rights precisely in an actual agreement. Use the parties' real assets and evidence, and distinguish ownership from the permission granted. Licensing another person's IP requires a defined rights arrangement. ^[1]

Check that the licensor owns or can license the relevant assets. A registration in a founder's or group company's name can require additional documents. UK trade marks can be licensed, but the commercial agreement must still identify the right and permitted use. ^[2] Do not assume the company negotiating the deal controls every brand element it supplies.

Define products, territories and channels

State what the licensee may sell or promote using the brand. Address websites, marketplaces, social media and physical packaging where relevant. An approval for one product range should not silently extend to unrelated goods. Consider whether use by group companies, agencies or subcontractors is permitted and what responsibility the licensee retains for them.

If exclusivity is proposed, define its field and exceptions. The licensor may wish to retain direct sales or existing arrangements, while the licensee may expect protection for its investment. Those expectations need explicit terms and any relevant competition-law assessment. A broad label such as exclusive partner is not a complete description of the rights granted.

Make quality control workable

Identify the standards and approval process for products and marketing. State who submits samples, how quickly responses are given and how changes are handled. A licensor needs meaningful control over brand use, while a licensee needs a process that does not leave every launch waiting indefinitely for an undefined approval.

Keep approved versions and material changes traceable. If packaging is altered after approval, assess whether a new review is required. Define how complaints, defects and misuse are escalated, including urgent action where reputation or customer safety is affected. The commercial team should know who can require a correction and what evidence is needed.

Calculate royalties from records the business can produce

Define the royalty base, deductions, reporting periods and payment dates. Gross sales, net sales and receipts can produce different amounts. Clarify returns, discounts, taxes and bundled products where relevant. Test the calculation with an illustrative transaction before signing so both finance teams understand the same result.

Agree proportionate audit rights, confidentiality and correction of underpayments. A right to inspect records should connect with the information needed to verify royalties rather than expose unrelated business data without purpose. Keep reporting duties practical enough to operate consistently across the permitted channels and territories.

Allocate infringement and new-brand decisions

State who monitors misuse, notifies the other party and controls any response. The licensee should not automatically make threats or settle a claim involving the licensor's rights without authority. Identify costs, cooperation and the handling of competing claims. A licence does not guarantee that no third party will challenge the brand.

Decide who owns new artwork, local-language adaptations or sub-brands created during the relationship. Obtain rights from external designers where needed. Approval to use the original mark does not settle ownership of every later contribution. Keep those assets and their permissions in the licence schedule as the arrangement develops.

Plan the final period of use

Address unsold stock, online listings, domain or social accounts and removal of brand materials at expiry or termination. If a sell-off period is allowed, define its duration, reporting and quality conditions. Avoid an indefinite informal continuation that leaves both parties uncertain about permission and royalties.

Read What to check in an IP licence for wider licence checks. IP licensing agreement review can help review the brand licence against the products, reporting and quality-control arrangements the parties intend to operate.

Keep approved samples identifiable

Retain the packaging or artwork version approved under the licence and connect it to the relevant product. If a complaint arises, both parties can compare the actual use with the agreed sample rather than debating different files described only as the final design.

Illustrative scenario

A manufacturer allows a retailer to sell a co-branded range. The parties agree the products and packaging approval process, but must also decide what happens to unsold stock when the licence ends. A limited sell-off arrangement may need conditions on quality, reporting and continued use of the marks.

Preparation checklist

• List the registered marks and other licensed assets.
• Define products, territory, users and approval rights.
• Agree royalty reporting and compliance checks.
• Plan infringement handling and post-termination stock use.