Licensing and franchising: Generating revenue from your IP
Licensing and franchising are powerful strategies for commercialisation, allowing you to monetise your intellectual property (IP) by granting third parties the right to use your brand, technology, or creative works in exchange for a fee (royalty).
This process transforms IP from a static legal asset into a dynamic, recurring revenue stream.
However, the success of this strategy hinges entirely on the quality, comprehensiveness and enforceability of the underlying agreement.
Licensing and franchising: How we assist you
We assist you in building a robust commercial framework that ensures your IP is leveraged profitably while your core rights are fully protected.
Our approach is not limited to drafting documents; we focus on the commercial architecture of the deal.
We advise on optimal royalty structures, territory definitions, quality control mechanisms, and, crucially, termination and dispute resolution clauses to safeguard the integrity of your IP.
Our unique capability in this area
Our firm's advantage comes directly from our deep expertise in IP litigation and contractual disputes.
We draft licensing and franchising agreements not just to look legally sound, but to be litigation-resistant by anticipating the exact points where agreements commonly break down and lead to conflict.
- Dispute-proof drafting: We construct airtight terms for the scope of use, payment triggers, and breach protocols, drastically reducing your exposure to future contractual disputes and revenue loss.
- Commercial-first risk assessment: We conduct thorough due diligence on potential licensees or franchisees, ensuring they have the commercial and financial capability to uphold your brand's standards and meet their obligations.
- International frameworks: We structure agreements that account for varying international IP laws and regimes, ensuring your cross-border commercialisation strategy is both profitable and compliant in every territory.
Licensing and franchising: Common questions and answers
What are the biggest risks in a licensing or franchise agreement?
The biggest risks are loss of control (over quality and brand reputation) and ambiguous termination clauses.
If the agreement doesn't clearly define performance metrics, quality standards, and the grounds for immediate termination, you risk long-term brand damage and costly litigation to end the relationship.
We focus on making these elements unambiguous - keeping you in the driving seat at all times.
How does a specialist IP firm make the contract "litigation-resistant"?
We make the contract litigation-resistant by focusing on the forensic details.
This includes meticulously defining the "know-how" or IP being shared, creating unambiguous quality control and audit rights, and, crucially, establishing clear dispute resolution mechanisms that favour the IP owner, minimising the chances of protracted High Court action - in the event of a commercial fall out.
Should I choose licensing or franchising for market expansion?
It depends on your asset.
Licensing is often best for a single, specific asset (e.g. a patent or a trade mark for a specific product), offering a simpler royalty stream.
Franchising is more suited for entire business models and systems (e.g. fast-food chains or retail concepts), requiring much more stringent regulatory compliance and detailed operational manuals. We help you choose the correct, most profitable path.
How do we ensure the licensee is accurately reporting sales and paying royalties?
We typically build powerful audit rights and reporting clauses into the contract.
These legally compel the licensee or franchisee to provide regular, detailed sales data and grant you the right, upon suspicion, to deploy an independent, expert accountant to audit their books.
This proactive enforcement mechanism is essential for securing your financial return; and stopping any issues from getting too significant before they're identified or can be addressed.
Ready to monetise your intangible assets?
The right agreement is the difference between successful scale and a costly dispute. Use the contact form below to arrange a strategic consultation with our team to discuss how we can structure licensing and franchising deals that drive predictable, long-term revenue.
The content on this page is provided for general informational purposes only and does not constitute legal advice. No solicitor-client relationship is created by your use of this site. While we strive to ensure the information is accurate and up-to-date, it should not be relied upon as a substitute for professional legal counsel. For specific advice regarding your legal situation, please contact us directly to arrange a consultation.
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