Contracts are drawn out between the product/brand owner and a company/individual who wants to use it for an agreed period of time in a designated territory.
Licensees typically pay a royalty fee or revenue share to the licensor companies. Licenses are generally given by companies when it believes that there can be extensions to the product for which it may not have the capabilities to produce. Though the licensee can derive profits from the licensed product, the ownership still rests with the licensor company. However, in the case of technology intensive products – there is always a danger of knowledge leakage through licensing.
In India Arvind Mills is the licensed manufacturer of Jansport, Wrangler , Nautica brands.