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Trademarks/Brands

Royalty Profile for Trademark/Brand-based Licensed Merchandise

 

Sector value, U.S. & Canada, 2017: $29.15 billion

  • Automotive/Motor Vehicle: $4.34 billion
  • Food/Beverage: $8.14 billion
  • Restaurants: $4.73 billion
  • Sporting Goods: $1.33 billion
  • Hardware, Appliance & Tool: $3.04 billion
  • Home-related: $0.41 billion
  • Electronics/Technology: $3.46 billion
  • Electronic Media: $0.23 billion
  • Other: $3.48 billion

Proportion of retail sales of licensed merchandise, U.S. & Canada, 2017: 26.7%

  • Automotive/Motor Vehicle: 4.0%
  • Food/Beverage: 7.5%
  • Restaurants: 4.3%
  • Sporting Goods: 1.2%
  • Hardware, Appliance & Tool: 2.8%
  • Home-Related: 0.4%
  • Electronics/Technology: 3.2%
  • Electronic Media: 0.2%
  • Other: 3.2%

Average royalty, U.S. & Canada, 2018: 7.78%

  • Automotive/Motor Vehicle: 4.07%
  • Food/Beverage: 5.61%
  • Restaurants: 5.93%
  • Sporting Goods: 7.01%

Royalty range, U.S. & Canada, 2018: 1%–16%

  • Automotive/Motor Vehicle: 1%–16%
  • Food/Beverage: 1%–11%
  • Restaurants: 4%–9%
  • Sporting Goods: 6%–14%

Average royalty, U.S. & Canada, (10 years) 2009–2018: 7.79%

  • Automotive/Motor Vehicle: 4.07%
  • Food/Beverage: 5.55%
  • Restaurants: 5.94%
  • Sporting Goods: 7.01%

Analysis

Royalty rates for licensing based on corporate brands and trademarks tend to run a percentage point or two lower than industry-wide averages, and are usually built on longer-term relationships than are entertainment-based licenses.

The range of royalties stretches to the extreme low end (2%), with competition among brands an added factor keeping rates in this sector below the average.

Royalty rates in this sector in particular are often largely dependent on the retail tier for which the licensing program is directed. Royalties for products headed for mass distribution are generally two points or so below those headed for specialty channels, since the margin requirements of mass merchandisers limit the amount of royalty that can be absorbed into the retail price.

That’s particularly true for food brand extensions that will be sold through supermarkets, where retail margins are slimmer than elsewhere. This is a significant sector within corporate licensing and brings the overall average down.


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