November’s One-A-Day Q&A – Question #10

10 11 2016

Q: Being new in the licensing business, how can I determine if a potential art licensee is playing fair with me or if they are taking advantage of my naivety?

november-q-a-final

 

A:  It’s hard to determine, but let me give you a couple of warning signs that I would watch out for. The first one is a manufacturer who sends you a contract that is one page in length and they tell you in no uncertain terms ‘don’t even consider changing anything.’ That to me is always a red flag because they are saying that we only want to do business our way.’ It lets you know they have very little, if any, flexibility and I would wonder why they would have a contract with nothing at all they are willing to change.  It doesn’t mean you can’t do a deal with them, but there is ‘caution’ sign post.

I would have to question why they are so determined to never change the contract and it would make me suspicious and question: ‘What is in it that’s not fair?’

The second red flag is when you have been requested by a manufacturer to make a couple of rounds of changes and they still aren’t buying (licensing) it. I might make a third change if I had seen the contract and knew we were proceeding after that.  But if for some reason, they still don’t sign on the bottom line, I would not continue to do ‘speculative’ work for them.

Instead of more and more changes I’d work on my communication with them to understand why they are requesting the changes, what they’re going to be doing with them and what’s going to happen after the changes are made.  What are the chances we are going to be doing this deal? Why can’t you do the changes after the contract is signed? Are you one in fifty artists making changes and just feeding them ideas? Or are you one in two and if you do the work, they are going to do the deal.  Just keep that in mind.

 

 

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