The 10 Most Common Pitfalls of Brand Licensing

by Pete Canalichio

Published on February 23, 2010

Brand licensing enables a company (licensee) that markets a product or service to lease or rent a brand from a brand owner (licensor) who operates a licensing program, in exchange for royalty payments.

Combining your product with top brands is an incredible way to escalate growth. If you are looking to drive revenue, enter new markets, or reposition your product, brand licensing can lead to dramatic results.

As with any new endeavor, however, pitfalls abound.

The biggest cost to an organization is not just the time or money but the loss of momentum regarding and commitment to the endeavor. What was supposed to have had a positive return on investment becomes a neutral or possibly negative one, which can lead to an untenable situation with contractual strings attached.

Here is a list of the most common pitfalls that I have witnessed or experienced over the past 15 years.

1. Biting Off More Than You Can Chew

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Pete Canalichio is the CEO of Licensing Brands Inc. (www.brandlicensingexpert.com) and author of numerous whitepapers, handbooks, and guides on brand licensing. Reach him via pete.canalichio@brandlicensingexpert.com.

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