How To Qualify A Prospective Licensee
A comprehensive, thoughtfully-developed application form is critical for ensuring that prospective licensees have what it takes for the program to be successful.
I developed it when I worked as a brand licensing executive at Coca-Cola and Newell Rubbermaid and then continually refined it through my consulting work with other Fortune 500 brands. It’s an 11-page document filled with the kinds of questions brands are likely to ask.
Here’s an example of what kind of projections you should ask licensees for. It’s taken right out of my guide:
What you want to know about licensees
Picking the right licensee is imperative to a brand’s strategy. Whether they partner with a larger, more established licensee or go with a smaller one, determining the right fit requires asking the right questions.
Example Questions You Should Ask A Potential Licensee
First, brands need to know if potential licensees are a well-known, large outfit or a smaller, more regional business. For smaller licensees, the questions might include:
- What kinds of products do you sell?
- What channels do you distribute products?
- Where are your products sold, locally or internationally?
- How long have you been in existence?
For larger licensees that may be more familiar to the brand, the questions are a little different:
- Where would my brand fit in your portfolio?
- How does it compare to your already existing brands?
- Do you have brands at a similar price point?
- Do you see this as a short-term exclusive product, or are you looking for a longer-term commitment?
Small or large, here are some of the questions you should be asking all licensees:
- What is the annual turnover of licensed products?
- How many people, in terms of resources, are you going to put on my brand?
- What is your incremental growth rate and annual sales rate (so I can compare it to my brand’s goals?)