What is a licensee?

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,277 reviews

Jump to Section

Need help with a Licensing Agreement?

CREATE A FREE PROJECT POSTING
Post Project Now

A licensee is the party that receives a license. Licensees are granted limited rights or legal permission by a licensor in the form of a license. Licenses enable a person or company (licensee) to do something that would otherwise be legally prohibited – like using someone’s branding, selling their products, or using their songs.

The rights a license grants to a licensee are limited by the authority of the licensor. In other words, the licensee will only be able to do what the licensor has the authority to grant. For example, if a company wants to license the use of a copyrighted information, licensor will only be able to grant the use of the copyrighted information they own it.

A licensee can also be a company that receives a license from the licensor. The licensee must be sure to obtain all of the rights that it needs to operate its business. A licensee must also operate the business legally.

Some examples of licensees include individuals with a driver’s license, and individuals licensed to practice law or medicine. Licensees may enter into a contractual relationship with a licensor to receive a license. A licensee may not receive greater rights in a license than a licensor has the ability to bestow.

What Does Being a Licensee Mean?

In intellectual property law, a licensee is an entity that has limited rights or permissions to use a patent, trademark, or other intellectual property owned by the licensor. Intellectual property licensees and licensors usually enter into licensing agreements containing negotiated terms for use of the licensor’s property.

In exchange for the limited use of the intellectual property, often licensees agree to pay royalties to the licensor. An intellectual property license permits a licensee to use, make, and/or sell the licensed property.

For example, if a Company A wants to make a cell phone that has a feature which is patented by Apple, Company A will need to license the use of that feature from Apple, and typically pay some sort of royalties or fees to do so.

In tort law, a licensee is distinguished in the common law from invitees and trespassers, usually for the purpose of ascertaining the duty of care owed by a property owner to an individual on his land in premises liability. Generally, licensees are people who have received express or implied invitation to enter the owned property without a mutually beneficial commercial relationship to the owner.

Read here for more information relating what does it mean to be a licensee.

How Licensing Works

Licensing for Franchisees

When you buy a franchise, you automatically get a license to use the brand and operating methods of the business. A major benefit of having a franchise is that you get a license to use the marketing materials, brand name, business model and other aspects of the company to build your own independently owned business.

The franchise license is different than other types of licensed businesses. With a franchise, you’re given the freedom to duplicate the business model in your location. This license comes with stipulations that you will manage and operate the business under the franchisee’s rules as laid out in the franchise agreement .

If you license a business, you get the ability to sell a company’s products in your store. Buying the license to sell a franchise’s products will not grant you the rights to open the franchise itself. For example, the Disney Corporation sells franchises of the Disney Store, and it also sells the license to sell Disney products.

Here is an article to read more about how licensing works with franchisees.

Licensing for Brands

When a company believes there is a strong consumer acceptance for brand or products, it may choose to license its brand(s). Licensees expect that the license will provide them with sales growth. This sales growth may be in the form of growth within existing market or the opportunity to enter a new market.

The licensing contract forces the licensee to achieve certain sales targets and royalties; therefore, the goal of the licensee is to quickly meet their business objectives, thereby achieving their contract obligations. Royalties is the money paid to a licensor by the licensee for the right to use the licensed property.

Apart from benefits to licensors, licensees benefit as well. Licensees lease the rights to a brand for incorporation into their merchandise, but do not share ownership in it. Having access to major national and global brands, and the logos and trademarks associated with those brands, gives the licensee significant benefits.

When brand managers enter or extend into new product categories via licensing , they create an opportunity for a licensee to grow their company. Following is an example of the steps in the process for the licensed product:

  • Licensor chooses the product categories to be licensed
  • Licensor finds and negotiates a license with the best licensees
  • Licensees develop concepts, protypes and final production samples and submit for approval
  • Licensor approves licensed products for sale
  • Licensees sell licensed products to authorized retailers

Here is an article for more information relating to licensing brands.

Meet some lawyers on our platform

Max M.

87 projects on CC
View Profile

Tabetha H.

6 projects on CC
View Profile

Maxwell L.

4 projects on CC
View Profile

Richard N.

59 projects on CC
View Profile

Licensing for Real Estate

The requirements for real estate licensing vary widely from state to state. Some states require a certain level of education, and/or a certain number of credit hours in real estate coursework, before you can take the licensing exam.

Eligibility Requirements

There is no national standard real estate licensing checklist. Each state sets its own requirements. You may have to meet residency restrictions, requirements for pre-licensing coursework, and a lot of other paperwork. You may have to complete various training programs, go through a background check, be fingerprinted, and show proof of employment with a sponsor or managing broker/brokerage.

Other eligibility requirements that differ from state to state include:

  • Education requirements
  • Hours of coursework minimums
  • On-the-job training requirements
  • Exam pass rates
  • Proof of employment with a sponsor or managing broker/brokerage
  • Errors and omissions insurance

Pre-Licensing Education

All states require some type of real estate pre-licensing education. Once you complete your coursework, you will have to pass a state administered exam in order to continue. Some states require you to have a certain number of hours of on-the-job training in addition to your pre-licensing coursework.

Read here for more information on how licensing works for real estate.

Operating License

Operating licenses means all licenses, franchises, permits, consents, approvals, registrations, certificates and authorizations of all Governmental Authorities necessary or advisable to the conduct of the businesses of any of the Company parties.

Read here for more information relating to operating licenses.

Difference Between Licensor and Licensee

The licensee is the party that receives a license, while the licensor is the party that grants the license. For instance, when a bar owner gets a liquor license from the state where he operates his business, the owner is the licensee and the government that issued the license is the licensor.

Understanding Licensing Law

A licensing agreement allows one party (the licensee) to use and/or earn revenue from the property of the owner (the licensor). Licensing agreements generate revenues, called royalties, earned by a company for allowing its copyrighted or patented material to be used by another company.

Depending upon the situation, licensing laws will differ. Example, licensing laws for branding are different from licensing laws for Franchises. Though the laws may differ, the role of a licensee does not change.

Benefits of Licensing for a Licensee

Franchisees

A major benefit of having a franchise is that you get a license to use the marketing materials, brand name, business model and other aspects of the company to build your own independently owned business. With a franchise, you’re given the freedom to duplicate the business model in your location.

Read more about benefits of franchisee licensees here .

Brands

Licensees lease the rights to a brand for incorporation into their merchandise, but do not share ownership in it. Having access to major national and global brands, and the logos and trademarks associated with those brands, gives the licensee significant benefits.

Read here for more information relating to the benefits of licensees for brands.

Intellectual Property

Some advantages/benefits of licensing include:

  • Income without overhead
  • Potentially better marketing
  • Enter foreign markets more easily
  • Diffuse conflicts

Read here for more information relating to the benefits of licensees of intellectual property.

Get Help with Licensing

Do you need help with licensing?

Post a project in ContractsCounsel’s marketplace to get free bids from lawyers for the work. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

View Sammy
Member Since:
November 4, 2020

Sammy N.

Attorney
Free Consultation
Get Free Proposal
Raleigh, NC
3 Yrs Experience
Licensed in NC
Campbell University School of Law

Sammy Naji focuses his practice on assisting startups and small businesses in their transactional and litigation needs. Prior to becoming a lawyer, Sammy worked on Middle East diplomacy at the United Nations. He has successfully obtained results for clients in breach of contract, securities fraud, common-law fraud, negligence, and commercial lease litigation matters. Sammy also counsels clients on commercial real estate sales, commercial lease negotiations, investments, business acquisitions, non-profit formation, intellectual property agreements, trademarks, and partnership agreements.

View Brad
Member Since:
November 6, 2020

Brad H.

Principal
Free Consultation
Get Free Proposal
Raleigh, NC
10 Yrs Experience
Licensed in NC
University of North Carolina

Brad is a business attorney with experience helping startup and growing companies in a variety of industries. He has served as general counsel for innovative companies and has developed a broad knowledge base that allows for a complete understanding of business needs.

View Matthew
Member Since:
November 6, 2020

Matthew R.

Attorney
Free Consultation
Get Free Proposal
Denver, Colorado
15 Yrs Experience
Licensed in CO, OH
Case Western Reserve University

I am an attorney located in Denver, Colorado with 13 years of experience working with individuals and businesses of all sizes. My primary areas of practice are general corporate/business law, real estate, commercial transactions and agreements, and M&A. I strive to provide exceptional representation at a reasonable price.

View Christopher
Member Since:
November 6, 2020

Christopher S.

Partner
Free Consultation
Get Free Proposal
Toledo, Ohio
5 Yrs Experience
Licensed in OH
University of Toledo

Chris Sawan is a JD/CPA who practices in the area of business law, contracts and franchising in the State of Ohio.

View Elizabeth
Member Since:
November 23, 2020

Elizabeth C.

Contracts Specialist
Free Consultation
Get Free Proposal
Sarasota, FL
13 Yrs Experience
Licensed in NJ, NY
Quinnipiac University School of Law

As an experienced contracts professional, I offer an affordable method to have your contracts reviewed! With my review of your contract, you can understand and reduce risks, negotiate better terms, and be your own advocate. I am an Attorney, Board Member, and Freelance Writer with a Bachelor of Arts degree, magna cum laude, in Film, Television and Theatre (“FTT”) from The University of Notre Dame. I was awarded The Catherine Hicks Award for outstanding work in FTT as voted on by the faculty. I graduated, cum laude, from Quinnipiac University School of Law, where I earned several awards for academics and for my work in the Mock Trial and Moot Court Honor Societies. Additionally, in my career, I have had much success as an in-house Corporate Attorney with a broad range of generalist experience and experience in handling a wide variety of legal matters of moderate to high exposure and complexity. My main focus in my legal career has been contract drafting, review, and negotiation. I also have a background in real estate, hospitality, sales, and sports and entertainment, among other things.

View Elizabeth
Member Since:
January 20, 2021

Elizabeth R.

Attorney
Free Consultation
Get Free Proposal
Columbus, Ohio
11 Yrs Experience
Licensed in FL, OH
Florida International University School of Law

Elizabeth is an experienced attorney with a demonstrated history of handling transactional legal matters for a wide range of small businesses and entrepreneurs, with a distinct understanding of dental and medical practices. Elizabeth also earned a BBA in Accounting, giving her unique perspective about the financial considerations her clients encounter regularly while navigating the legal and business environments. Elizabeth is highly responsive, personable and has great attention to detail. She is also fluent in Spanish.

View Abby
Member Since:
December 7, 2020

Abby V.

President
Free Consultation
Get Free Proposal
Washington, DC
15 Yrs Experience
Licensed in DC, NJ, NY
Loyola University Chicago School of Law

Abby is an attorney and public policy specialist who has fused together her experience as an advocate, education in economics and public health, and passion for working with animals to create healthier communities for people and animals alike. At Opening Doors PLLC, she helps housing providers ensure the integrity of animal accommodation requests, comply with fair housing requirements, and implement safer pet policies. Abby also assists residents with their pet-related housing problems and works with community stakeholders to increase housing stability in underserved communities. She is a nationally-recognized expert in animal accommodation laws and her work has been featured in The Washington Post, USA Today, Bloomberg, and Cosmopolitan magazine.

View Brit
Member Since:
December 29, 2020

Brit B.

General Counsel
Free Consultation
Get Free Proposal
Remote (company based in Houston)
8 Yrs Experience
Licensed in TX
University of Maryland, School of Law

First in-house counsel for small TX-based company operating in the Middle East. Experienced with drafting, revising, and editing a variety of domestic and international contracts.

View Matan
Member Since:
January 4, 2021

Matan S.

Attorney
Free Consultation
Get Free Proposal
Philadelphia, PA
9 Yrs Experience
Licensed in NJ, PA
Rutgers

Matan is an experienced M&A, corporate, tax and real estate attorney advising closely held businesses, technology start ups, service businesses, and manufacturers in purchases, sales, and other exit strategies. Matan works with founders and first-and-second generation owners to strategically transition businesses.

View Octavia
Member Since:
January 30, 2021

Octavia P.

Attorney
Free Consultation
Get Free Proposal
Chicago, IL
15 Yrs Experience
Licensed in IL
The John Marshall Law School

I am a business law attorney with over 10 years’ experience and a strong background in information technology. I am a graduate of the University of California Berkeley, a member of the Illinois bar and a licensed lawyer (Solicitor) of England and Wales. I actively partner directly with my clients or indirectly, as Of Counsel, to boutique law firms to streamline business practices and manage legal risks by focusing on essentials such as - business contracts, corporate structure, employment/independent contractor agreements, website terms and policies, IP, technology, and commercial related agreements as well as business risk and compliance guidance.

View Sean
Member Since:
January 26, 2021

Sean D.

Business Attorney
Free Consultation
Get Free Proposal
Elkridge, Maryland
24 Yrs Experience
Licensed in MD
University of Maryland Francis King Carey School of Law

Accomplished and results-driven business attorney with extensive experience in commercial real estate / project finance, commercial transactions, and entity formations, that possesses a winning blend of subject matter expertise, skill in client relationship management, and practical experience. Leverages a unique mix of legal, strategic, and analytical expertise that consistently meets and surpasses client expectations. Specialties: Commercial Real Estate Law, Contract Negotiation, Entity Formation, Joint Ventures, Procurement, Lease/Buy/Sell Transactions, Business Consultations, Team Leadership, and Economic Development

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call