Looking around, many enterprises have been caught in such a dilemma: without publicizing the brand, without advertising, the lack of visibility, the enterprise may not be able to survive at all; spend a lot of money to advertise and push the brand, the effect is not necessarily ideal. This is particularly prominent in some small and medium-sized enterprises. At this point, a part of the foresight of entrepreneurs in the full realization of the importance of establishing a brand and brand building the degree of difficulty, the hope of the eyes cast a new business model - brand licensing alliance.
Brand authorization, also known as brand licensing, refers to the authorizer will own or act as a trademark or brand in the form of a contract granted to the authorized person to use; the authorized person to engage in business activities in accordance with the provisions of the contract (usually the production, sale of a product or provide certain services), and pay the corresponding fees to the authorizer - royalties; at the same time, the authorizer to be authorized to give the training of personnel, organization, design, management and other aspects of guidance. At the same time, the licensor gives the licensee personnel training, organizational design, business management and other aspects of the guidance and assistance. Franchising refers to the franchising licensee to teach its products and operational models to the franchise system franchisee to use, so that the franchisee is authorized to operate a product or service. As can be seen, the two forms of organization are very similar, but from the brand licensor and licensee, franchise licensor and licensee of the essence of the relationship between the two, there is still a big difference: brand licensing emphasizes the authorizer and the licensee's bond is the brand, while the franchise licensor and the licensee's bond is a product or service.
Relatively speaking, brand licensing gives licensees more freedom, adapts to a wider range of industries, and makes it easier to achieve complementarity of strengths between brand licensors and licensees, and between licensees and each other; moreover, because the products or services provided by licensees may be different, the possibility of conflict and the difficulty of coordination are smaller. For example, the Disney Company has more than 4,000 brand authorization franchise enterprises around the world, whose products range from the most common ballpoint pens to watches worth $20,000 a piece. In China's domestic operation is quite successful famous cartoon brand ─ ─ "Babu Dou" brand alliance, has like MasterCard Group (sports shoes), Hall Group (bedding series), Shanghai Li Guo knitting (socks), Hong Kong collar high company (plush toys, bags) and so on more than a dozen different types of franchisee manufacturers. In terms of time, franchising emerged relatively early in China, with McDonald's, KFC, Malan Ramen, Quanjude and Lianhua Supermarket all being quite successful cases, but it relies heavily on the franchisor in terms of evaluation, publicity and coordination, and places more restrictions on the franchisee. The premise tends to be that the product or service being franchised is quite successful and is more applicable to the restaurant, retail and service industries.
While brand licensing may be relatively new to most businesses around us. But in fact, brand licensing as a business approach has a long history of development in the United States, Europe and Southeast Asia. Its origins can be traced back to the founding of Walt Disney Pictures. One day, Walt walked into a restaurant, a man approached him and said: "I'm a furniture manufacturer, I give you 300 dollars, you let me put the image of Mickey Mouse printed on my writing desk, okay?" Walt readily agreed. This amount of money also became the first brand license money received by Disney. It was this business model and Disney theme parks that created this famous company. Currently in the United States, a variety of brand-authorized products have accounted for one-third of the retail market, and is the most rapid growth of a sales force. In Singapore, the development of brand licensing has even been listed as one of the government's main business policies.
Combined with the actual situation in China, from the analysis of the environment, China's current promotion of brand authorization has the following favorable conditions: increased demand for consumer goods and services, consumers have produced a clear brand appeal; with the increasing market competition and competition in the form of upgrading, corporate competition is gradually shifting from price competition to non-price competition.
From a microscopic analysis, brand authorization is likely to be a profitable thing for the authorized party. For all the hard work, relying on a fist product or service to successfully establish a brand for the enterprise, this will have a brand to promote the risk of a wide range of obviously less than the risk of getting involved in a completely new or rusty industry and market, and pay the cost is also lower. Of course, some companies are currently used to open a branch, to engage in joint ventures and other methods, can also play a certain positive role, but these methods due to such and such defects, the effect is difficult to control. Brand authorization can avoid similar problems, because the brand authorization is the enterprise initiative, planned output brand, output management, the authorizer can be authorized through the form of contract to regulate the behavior of the authorized party and the scope of business, you can avoid "a hair out of control" of the situation.
On the other hand, brand authorization is of greater significance to the licensee. There is a real thing has been in the industry is a good story: in the U.S. economic downturn, a has applied to the court for bankruptcy of the manufacture of electric toy train company Ryan, due to a very fortuitous opportunity to obtain authorization from the Disney company to produce Mickey Mouse train toys, put into the market for four months to sell two hundred and fifty thousand, and the company has miraculously risen from the dead.
While from the above analysis, we can see that brand authorization is beneficial to both the authorizer and the licensee. However, we should also note that the two parties to a brand licensing alliance are, after all, two different owners and interests, and are prone to a variety of conflicts, which may even lead to the breakup of the licensing alliance. In order to prevent problems before they occur, the authorizing party and the authorized party must sign a contract before asking themselves the following questions:
To the authorizing party: whether there is a need to use the brand authorization? Is it feasible to establish a licensing alliance? Whether there is enough management and service of the entire authorized alliance capacity and experience? For the licensee: Is there a need to use the brand license to promote the original products and services? Does the licensee have a good overall condition and business record? Is the licensee protected by relevant laws? Can the licensee provide strong training, legal and coordination support?
To ensure that the brand licensee has a good overall condition and business track record, is the licensee protected by relevant laws?
To ensure that brand licensing to achieve real benefits, the licensee should pay attention to the following points:
1. Through in-depth investigation and analysis, to build a mature brand licensing system.
The promotion of brand licensing is a delicate, complex and highly specialized execution process. As a licensee who intends to expand his brand, before building a brand alliance system, first of all, to find out their own strength. Secondly, to clarify the market positioning, if you can not study the needs of customers, that no matter how good the mode of operation can not play its superiority in the market. Then, must be carefully analyzed, carefully designed. The choice of franchisee manufacturers is one of the particularly important part. In the solicitation of franchisees, must be clear authorization provisions, the development of selection criteria, a comprehensive assessment of the qualifications of the authorized person, to establish a long-term mutually beneficial relationship for the recruitment of the basic conditions.
After the establishment of the authorization of the alliance, the authorized party should also be regularly assessed by the authorized party, and pay attention to the construction of the overall corporate culture, the only way to reflect the values of the enterprise from the inside out and the characteristics of the business.
2. Grasp the rhythm of the development of the franchisee to maintain and improve the good image of the brand authorization alliance.
Authorized parties in the beginning of authorization, should strictly follow the overall plan formulated in the early stages, and do what you can, do not rush. Because if the development is too fast, the licensee is likely to cope with a variety of new or unforeseen problems and exhausted, affecting the entire brand licensing alliance's operational efficiency, and may even destroy the good image of the original brand. Take Disney as an example, in the early stage of authorization activities, Disney only cared about expanding the franchisee team, and did not care about the quality of the products. Later, advertising guru Hermon Kaiman suggested that Disney should pay attention to the quality of authorized products to prevent inferior products from tainting the brand. Subsequently, Disney immediately accepted the suggestion and signed a contract with Hermon Caiman to handle the licensing business on behalf of Disney. Relying on Caiman's professional operation and strict control, the quality of Disney's licensed products has been greatly improved. Recently, Walt Disney made the decision to stop using Disney cartoon images to decorate cell phones, based on the consideration that there is no reliable evidence to prove that the use of cell phones does not pose a threat to health, especially children's health. Although this affects short-term revenue, it is necessary to maintain the brand image for long-term benefits.
3. Establish a concise and efficient authorization process and system.
In order to adapt to the modern trend of flat corporate organizational structure and to give full play to the flexibility of the authorization system, the organizational design of brand authorization should be as simple and clear as possible. Within the scope of the authorization contract, the authorized party should be given full freedom, and the authorized party try to act as a good "consultant" role.
4. Legal protection of brand authorization.
Modern society, the emergence of new business models, many times the development of the law will not be able to keep up with the development of the situation. Coupled with the weak legal awareness of many domestic enterprises, the legal protection of the brand in the domestic brand licensing activities is quite a key link. Whether intentional or unintentional counterfeiting infringement, the impact on the brand as a link to the brand authorization system is quite huge, and sometimes even lead to the collapse of the authorization system. The setback of the domestic sales of many internationally acclaimed brand-name products in China is directly related to the proliferation of imitations, such as Nike sports shoes and Montjuic clothing. In the process of preventing such adverse effects, the authorizing party should play a major role. In this regard, Disney can be said to be a good example, but also for the domestic counterparts on how to protect the brand on a vivid lesson. 1992, Walt Disney Company in China on behalf of the domestic children's picture book constantly found Disney cartoon characters in the "traces". Later, after careful comparison, Disney believed that these books belonged to the unauthorized publications, so the people concerned sued the court. As a result, Disney won the case.
From the franchisor's point of view, the first thing to do is to make sure that the authorized party has a legitimate and complete authorization qualification. After all, the brand authorization business model in our country to carry out the time is not long, in the operation of the laws and regulations to match with a lot of irregularities and imperfections, it is very easy to make the brand authorization deformation out of shape. According to reports, the relevant departments have found that there are some unscrupulous people under the guise of brand authorization, and some even trademarks have not been registered, then engaged in the so-called brand authorization. Once you join this "alliance", the consequences are unimaginable. Secondly, the need to strategically consider whether the authorizer's brand matches the enterprise's products or services, whether it has a greater degree of relevance, which often requires a direct interview with the authorized representative as well as reference to the situation of authorized enterprises. If the choice is among several authorized brands, then it is even more important to examine and compare them in depth, and finally determine the most appropriate one. Again, the licensee should study the scope of the authorization contract and geographical and other constraints to see whether it reduces the attractiveness of the authorization. Because if there are more than two franchisors of the same brand in the same area with the same or close to the same type of product, the competition will often be very fierce, and the significance of obtaining authorization will of course be greatly reduced. Finally, from a financial point of view, the use of a variety of methods of investment appraisal and peer comparison methods to judge whether the royalties or franchise fees are reasonable.