LICENSING GUIDE
What Is Licensing? License Agreements, Key Terms and Process
Licensing is the business of granting the right to use intellectual property such as brands and characters under contract, in exchange for royalties. I-Licensing Korea is a licensing agency that manages contracts, product approvals and royalties between IP owners and licensees.
STRUCTURE
How licensing works
Licensor (IP owner) — the company or artist that owns the brand or character
Licensee — the company that designs, produces and sells licensed products
Agent — connects both sides and manages contracts, approvals and royalties; this is our role
KEY TERMS
Key terms of a license agreement
Territory — countries covered, such as Korea or Asia
Categories — product scope such as apparel, bags or living
Term — contract period and renewal conditions
Royalty — rate on wholesale or retail price and minimum guarantee (MG)
Approvals — IP owner approval of designs, samples and marketing
PROCESS
Six-step process
1. Business meeting
2. Brand or character proposal
3. Negotiation and term sheet
4. Agreement and style guide
5. Product development and approvals
6. Launch and royalty reporting
ROYALTY
How are licensing fees (royalties) set?
Royalty rate — the licensee pays the IP owner a percentage of sales. The amount depends on whether the base is the wholesale or the retail price; rates are negotiated by category, territory and the strength of the IP.
Minimum guarantee (MG) — the minimum total royalty guaranteed over the term regardless of sales; royalties above the MG are paid on top.
Advance — paid at signing and recouped from future royalties.
Reporting — sales and royalties are reported and settled on an agreed schedule.
FOR LICENSEES
How to become a licensee
1. Define the brand or character, product categories and sales channels you are interested in
2. Contact us to receive the brand deck and basic terms
3. Submit a business plan with product range, expected volumes and launch timing
4. Negotiate royalty, MG, term and territory, then sign the agreement
5. Launch after design and sample approval, and report royalties on schedule
FAQ
Frequently asked questions
Q. Why work with a licensing agent?
Direct communication with IP owners shortens approvals, and contracts, design approvals and royalties are managed in one place.
Q. How do I start?
Tell us the brand or character and categories you are interested in via the inquiry form or i-licensing@naver.com.
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