Licensing as a business strategy
Trademark licensing is used for merchandise programs, collaborations, regional expansion, and inside corporate groups where a holding company licenses marks to operating companies. Each structure carries different control and tax considerations. Intercompany licenses in particular should reflect real oversight and arm's-length terms, since tax authorities may review them. A program holds up when the owner has the capacity to supervise licensees and their products, not just to collect royalties, because unsupervised use can erode the mark itself.
When a license becomes a franchise
A license that carries fees and a real say over how the licensee runs its business can fall within federal franchise rules, and New York's franchise law reaches some arrangements even more broadly. Franchise status brings disclosure obligations before any sale and, in New York, a registration requirement as well, with real consequences when it is skipped. Distribution and dealer arrangements can raise the same issue. This is one of the more expensive surprises in brand licensing, and it is worth checking before the first deal is offered.
Building the program
We start with the portfolio: whether the marks are registered for the goods licensees will sell, in the countries where they will sell them. Registration gaps are easier to close before a licensee launches. We then talk about how many licensees you expect, how products will be approved, and how you will monitor the program over time. If licensees will sell abroad, some countries expect licenses to be recorded locally, and registrations there may be needed first. Bring your registrations, any existing license terms, and the business plan for the program.
