- Too short a term
– Insufficient time for the Licensee to make a return on its investment
– Once again potential for “priming the market”
- Too long a term
– Licensor potential has its hands tied and so cannot fully leverage brand value
- Licensors do not normally seek to end their relationship with successful Licensees – “worth their weight in gold”
“Unless terminated earlier pursuant to clause [x], this Agreement shall continue in force for an initial period of three years (“the Initial Period”). Provided that sales of the Licence Products in the Territory in the Third Year are sufficient to generate the Minimum Guaranteed Royalty, then this Agreement shall continue in force for a further period of two years following the expiry of the Initial Period.”