- Worldwide
– Unlikely to be granted unless a weak Licensor + powerful and financially robust Licensee
- Too wide a Territory
– Potential for losing exclusivity and priming the territory for someone else (very annoying!).
- Too narrow a Territory
– No room for expansion, therefore saturation of the market
– Pressure to be more innovative to maintain market share and profit.
- Current areas of operation
– What is the brand recognition in respect of the proposed product type in the territory?
– The greater the recognition, the lower the investment required by the Licensee therefore higher minimum guarantee.
“The Licensee shall, during the term of this Agreement, have the exclusive right to sell the Licensed Products in both the Territory and the Extended Territory provided however that should the Licensee fail to achieve the Minimum Sales Targets in respect of an Extended Territory then the Licensee’s right in respect of the relevant Extended Territories in respect of which the Minimum Sales Targets are not achieved shall become non-exclusive immediately following receipt of a notice to that effect from the Licensor.”