Navigating legal aspects: Understanding brand licensing agreements in Real Estate.

Licensing Agreement refers to a written, legal contract wherein the licensing brand gives the other party, says the developer, in case of real estate brand licensing, the exclusive rights to use the brand name, logo and trademark of the well-established licensing brand. Legally speaking, the agreement must specify the legal business names of each of the parties involved in the transaction. 

The Licensor is the person or party or the licensing brand, who grants the rights to use the brand name, logo or trademark to the licensee as per the legal act and proper written agreement. 

Licensee is the person who receives the rights to use the brand name, logo, or trademark and is entitled to use them subject to certain conditions and legal guidelines. The licensee has to pay an amount or royalty, in turn to the licensing brand/party or the licensor. 

Any licensing agreement is expected to incorporate the following factors:

  • The legal business names of each of the parties involved in the real estate brand licensing agreement, the licensor that lends its name to the licensee for business purposes, adhering to all probable clauses and conditions of its usage.
  • The granting of rights by the licensor to the licensee to use their exclusive brand name, logo or trademark or even trade policies/secrets for the expansion of their plausible joint business venture in the real estate sector. 
  • The definition of the rights, their scope of usage, their jurisdiction areas and their applications to be specified in accordance with the legal guidelines.
  • Termination of the contract/licensing agreement/ mutual decision regarding the Real Estate brand licensing project.

Real estate brand agreement is a business contract that is shared between two or more parties for the exclusive, non-exclusive or co-exclusive model of usage of the brand name, logo or trademark of the licensing brand. It basically lays down the probable clauses and conditions for the exclusive or non-exclusive usage of trademark, logo and also grants access to certain copyrights. 

The licensing agreement covers the usage of company trade secrets, knowledge of company policies and increases the visibility of the brand name. Rights given to the licensee should be clearly defined and clearly mentioned in the licensing agreement, the royalty that is accrued to the licensing brand should also be clearly defined.

Licensing is especially unique to the sectors of trade, business and industry and nowadays quite popular in the real estate sector. Licensing is significant to derive new business avenues into fresher geographical areas, thus expanding business horizons; developing newer sources of revenue generation, opening diversified cross-marketing channels, developing a competitive edge over other competitors in the real estate market and implementing strategic ways to foster and grow the business to multi-dimensional prospects.

There are certain legal considerations in real estate brand licensing and there are pre-defined conditions for the usage of a company’s logo, trademark, patent or other intellectual property that are exclusively owned by the licensor company.

A company’s brand name and logo are the most unique and exclusive asset of the company that is authorized for use by the licensor party to the licensee under the brand licensing agreement. Authorizing a third party to use the trademark brand name and logo requires careful consideration and control.

Licensees enter into a contractual relationship with the licensor to receive the license. A licensee is that entity contained in the legal brand licensing agreement that has limited rights or permission to use a patent/trademark or other intellectual properties. For the usage of trademark, logo, patent or brand name the licensee agrees to pay royalty to the licensing brand. 

There are several benefits that come exclusively with the brand licensing transaction:

  • The usage of marketing materials and communication modules of the company.
  • The knowledge and access to the business operation module of the company.
  • Other lesser revealed trade methodologies of the company are accessible upon entering into the brand licensing agreement which, in turn benefit the licensee in enhancing and elevating his own business to greater horizons. 

Brand licensing agreements are an essential part of any successful business strategy. 

By entering into a brand licensing agreement, companies can expand their reach, increase their value and maximize their potential for success while also protecting themselves from legal issues and monetizing their brands.By formalizing the terms of the agreement, both parties are able to protect the integrity of the brand whilst ensuring that the licensee is not infringing upon any rights held by either party.

For example, if any Real Estate developer enters into an agreement with FashionTV to legally use the FTV Real Estate brand license to enhance the commercial prospects of his real estate assets then he will definitely benefit from:

  • The brand name of FashionTV.
  • The global reach and recognition of FashionTV.
  • Usage of the brand name and logo of FashionTV.
  • Entry into a professional and diversified cross-marketing channel.
  • Expansion of business communication at a much larger level.

A well-drafted license agreement should provide clear guidance on how both parties should act moving forward and could even include provisions relating to termination or dispute resolution if needed. Entering into this type of agreement helps businesses expand their reach by tapping into new markets and reaching out to new customer bases which could ultimately lead to increased sales or profits as well as greater overall recognition for the licensee.
Overall, there are far-reaching implications of entering into a brand licensing agreement and its technical legalities but the pros of such a mutual business proposition far outweigh the cons. Hence,brand licensing plays a crucial role in Real Estate market expansion and trade. The future of the Real Estate market definitely lies in brand licensing.

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