Ferrari licensing, how does it work?

generally speaking, licensing deals work as follows.

you pay an up-front guarantee for the license (earnest money, from their perspective). you agree on a royalty rate per item (eg: 10% of your gross sales). once you've sold enough to recoup the prepaid royalties guarantee, you start wriring them quarterly checks. the license lasts for N years and may or may not be exclusive. pretty straightforward.

the hard part is convincing them that you've got the mojo to sell enough of the widget in question to make it worth their while.

of course ferrari being ferrari, they might do something totally different.

doody.

PS: feel free to email or PM me if you get serious about this. i've done a few consumer goods licenses like this and would be happy to brain dump on you (not that i have much left to lose).

 

Unless someone has a better contact, i know the general counsel here in NA and could ask how they approach it. I suspect that this stuff has to get approved back in Italy, but that's just a guess. Usually, licenses are issued for discreet product areas, often very distinct categories that don't allow the licensee much latitude to improvise and offer products other than specifically designated ones. Usually, there is a quality approval process, as well as a financial vetting process, because the licensor will not want to tie up its rights, even on a non-exclusive basis, with a half-assed licensee. Usually, the deals (and here, again, i am speaking generally, not in Ferrari's case), often require a minimum guaranteed royalty, ie, the licensee makes a guaranteed payment of $XXX for, say a year's licensing period, if its sales don't exceed that amount in royalties, at least the licensor knows it will get a minimum payment. And, if the licensee can't meet certain sales or royalty thresholds, the licensor often has a right of early termination. Hope you found this helpful.

 

Hi Doody,

Would you be able to share some info on consumer goods licenses? Or at least to point me in right direction?

I would really appreciate it

Kind regards
Tom