LICENCING Flashcards
What is licencing
Licensing is a legal arrangement where one company authorises another to manufacture or sell their goods, services, technology or brand in return for a fee or royalty payment or a fee.
Examples of licencencing
In Dubai the shop Choithrams are licenced to sell Tesco products (those Tesco products are probably made in the UK and sold through the Choithrams network in the UAE)
Guinness sells their products worldwide, but because it is a liquid product, it would be difficult to transport. So Guiness licence factories across world to manufacture the beers in the country they are going to be sold in
What are the pros of licensing
Gain access to an existing distribution network
Licencsee may have established a group customers
Gain revenues from licencing fee
Eliminated need for investing in production facilities
Avoids tariff barriers
