Licensing question-

[alexfugazi]

So- here's a fun one-
Let's say a company wants to license your design, and pay you a per-unit sold amount, while you retain ownership of the design. All good, right? BUT- how do you make sure that the company is TELLING THE TRUTH when they say they've sold X qty products, and so here's your Y percent of the take?

Is the company usually required to give you access to their books? Like, do you have 'audit' authority?

Just curious if any of you guys have run into this...

[Barry Obama]

the licensor should provide quarterly reports and their records should be open to audit by the licensse. this should be in the contract. I license about 60 products a year, every one has a contract, every one has these clauses. they will usually want you to pay for your own audit, if it ever comes to that, sometimes you can make it so they have to pay.

[alexfugazi]

Well- that is helpful to know. Thank you sir.

60 PRODUCTS? WTF! Are you Disney now?

Ahem.

[scrojo]

Originally Posted by Barry Obama

the licensor should provide quarterly reports and their records should be open to audit by the licensse.y.

um . yep.

[scrojo]

most ( not all ) of the companies i've entered into a royalties contract have been honest. breach of contract and legal fees cost a shit load more than some shirts and stickers.

[printmafia-connie]

Originally Posted by Barry Obama

the licensor should provide quarterly reports and their records should be open to audit by the licensse. this should be in the contract. I license about 60 products a year, every one has a contract, every one has these clauses. they will usually want you to pay for your own audit, if it ever comes to that, sometimes you can make it so they have to pay.

Frank is correct, as usual. Make sure it is in the contract.
We have licensed in the past and are getting ready to license 40 designs.

[alexfugazi]

Nice...thank you all for your input.
And Connie- great Bukowski print. I call dibs on Vonnegut, though. I'll wrestle for him.