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Merchandise Licensing Agreement

For festival and event organizers licensing their event name, logo, and brand to a merchandise company, covers which products can be made, royalty splits, quality standards, and what happens to leftover inventory when the deal ends.

Want to manufacture goods you'll own and sell yourself instead? See the Merchandise Manufacturing Agreement.

Drafted by a Harvard Law entertainment attorney.

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Is this the right contract for your brand?

This contract is built for rights holders licensing a name, logo, image, or design and the companies that put it on products. It fits situations where you license intellectual property for merchandise in exchange for a fee or royalty and need to set the products, territory, and quality controls.

Good fit for

  • Brand and rights holders licensing their marks
  • Merchandise companies and licensees
  • Performers and public figures licensing a name or image
  • Designers licensing artwork
  • Retailers selling licensed products

You may also need

Before you start

It helps to have these details on hand before you create your contract:

  • The rights holder and the licensee
  • The name, logo, or design being licensed
  • The products covered
  • The royalty rate or fee and any minimum guarantee
  • Whether the license is exclusive or non-exclusive
  • The territory and term
  • Quality control and approval rights
  • How sales are reported and audited

What's Inside This Contract

Grant of license

Sets what marks are licensed, the products, and whether the rights are exclusive.

Term

Sets how long the license runs and the territory.

Compensation

Covers the royalty or fee, any minimum guarantee, and accounting.

Intellectual property

Sets ownership of the marks and quality control or approval rights.

Representations and warranties

Confirms each side has the rights and authority to enter the deal.

Disputes and general provisions

Covers standard terms such as notices, how disputes are handled, and signatures.

Points Worth Negotiating

  • The royalty rate and any minimum guarantee
  • Which products and regions are covered
  • Whether the license is exclusive or non-exclusive
  • Approval rights over product quality and design
  • How sales are reported and audited

Frequently Asked Questions

What is a merchandise licensing agreement?
A merchandise licensing agreement lets one party use a name, logo, image, or design on products in exchange for a fee or royalty. It sets the products, territory, and quality controls.
Who should sign it?
The rights holder, or licensor, and the company making the products, or licensee, both sign. Each signature confirms the products, the royalty or fee, and the quality controls.
What is a royalty in a licensing deal?
A royalty is a share of sales paid to the rights holder for each licensed product sold. Some deals also include a minimum guarantee.
What is a minimum guarantee?
A minimum guarantee is a set amount the licensee pays regardless of how many products sell, credited against royalties earned.
What should I have ready before creating it?
Have the rights holder and licensee, the name or design being licensed, the products, the royalty or fee and any guarantee, whether the license is exclusive, the territory and term, approval rights, and how sales are reported.
Why do quality controls matter?
Approval and quality terms let the rights holder review products before sale so the name or design is used the way they expect.
Should I choose the custom contract or the editable template?
Choose the custom contract to answer a few questions and have it filled in for you. Choose the editable template if you prefer a blank version with labeled fields to complete yourself.
What are common warning signs in a merchandise licensing agreement?

These are common issues to watch for in any merchandise licensing agreement:

  • Unclear what products are licensed
  • No quality control or approval rights
  • Vague royalty or accounting terms
  • Long exclusive term with no minimums
  • No audit right to check sales
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