The need to knows when it comes to royalty auditing in the fashion industry
Fashion and the exploitation of designer brands represent one of the UK’s most successful industries earning billions around the globe, but the only way it can work effectively is by drafting and enforcing watertight pre-agreed royalty agreements with licensees at home and abroad. ...
How do royalty audits help to maximise revenue for businesses?
There was a time when the receipt of royalties was largely confined to authors and songwriters but nowadays royalty income is much more likely to involve companies, academic institutions or Fashion Brands which license out intellectual property or product design to third parties either in the UK or abroad. ...
Music royalties for songwriters and how they work
Most professional songwriters hope to one day have a smash hit that saturates the airwaves and gains them more fans. ...
Royalty auditing and licensing
Fisher Forensic has an internationally established reputation in licensing, franchising and royalty auditing, undertaking hundreds of royalty audits each year across the globe. Our client roster boasts some of the world’s best selling authors, chart-topping musicians, trophy-winning football clubs, international fashion houses and luxury car brands, as well as an array of ‘Superbrands’, inventors and technology companies. We also act for many rights owners generating more modest levels of royalties, where we always ensure that it makes economic sense for them to use our services. We combine our extensive investigative skills with keen commercial awareness and have achieved an enviable record of success in generating and maximising our clients’ royalty revenue. Our keen expertise in various sectors combined with an in-depth knowledge of the ways in which these industries operate allows us to appreciate subtle nuances in working practices both geographically and, of course, contractually.
Broadly, our royalty auditing expertise covers:
- Brand extension
- Character merchandising
- Film audits
- Publishing and literary rights
We are extremely proud of the team that we have built at Fisher Forensic, marrying high-level technical forensic accounting skills with an in-depth knowledge of the IP sector that comes only through specialisation. We understand that relationships are key to business and believe that thorough reporting combined with meticulous research helps to achieve a favourable conclusion for both Licensor and Licensee and we work hard to maintain good working relationships. Our multi-national team prides itself on the validity of findings, ensuring both an economical and commercial benefit from audit. Having native linguistics of varying countries opens us up to markets such as Latin America, Japan, Korea and China. Comprising of the highest calibre forensic accountants and IP professionals in the field, we are fully aware that our people are our biggest asset.
The benefits of a royalty audit
Through licensing, a rights owner places its most valuable asset, its intellectual property, into the hands of the licensee. So it is not only right but also appropriate for the licensor to find out how the licensee is operating and using the IP at its disposal. Understanding how the licensee operates and interprets the Agreement is paramount to the success of your licensing programme and fundamentally your business. Interpretation of a contract can be difficult, sometimes with no correct answer. That’s why the devil is most definitely in the detail. The more precise the wording, the less room for hitherto unanticipated interpretation. An audit provides an opportunity for professional transparency and minimises the potential grey areas.
Applying commercial expertise from the beginning
A deal or Agreement that appeared comprehensive in theory can become inadequate in practice. It is essential that any licensing programme is backed up by highly specific clauses and terms in the Agreement which serve to eradicate any substantial financial losses in the future. To give just one example, Agreements often allow a licensee to apply certain indirect marketing costs against revenue when calculating royalties. Unless the terms are uniquely specified, disputes can emerge over their permissibility. We can offer advice on how to strengthen these key clauses to ensure that both parties are aware of their responsibilities.