How Much for the Brand License?

Originally published November, 2003

Hundreds of new trademark license agreements are developed each year. Corporate or brand extension licensing is visible in more categories than ever before. Given the value of many brands being licensed, use of an effective valuation methodology for brand extension licenses is important for licensors and licensees.

Numerous studies indicate that brands provide greater value than other corporate assets. Perhaps best known is the "Global Brands" study conducted by Interbrand; it concludes that brands account for more than a third of shareholder value (on average), and in many cases, more than 70% of shareholder value.

Today, there is a consensus among many academics, analysts and marketers that a strong brand can provide powerful competitive advantages such as greater customer loyalty, higher margins, and opportunities for brand extension and licensing.