The licensing process can vary in length, based on each applicant’s responsiveness in submitting the requests of CLC and each institution throughout the process. Many applicants can complete the application process within two months, while others may take considerably longer depending on how quickly they meet the requirements.
The application process time can also vary based on the number of institutions being sought. The fewer number of institutions requested, the more expeditious the application process. As such, CLC highly recommends that companies only apply for institutions that they are prepared to maximize in the near future. To avoid time pressures and financial loss, CLC strongly encourages applicants to fully complete the licensing process before making any commitments to the collegiate industry, including trade show attendance, retail pre-orders, etc. CLC treats all applicants equally and on a first-come, first-served basis and therefore cannot accommodate “rush” requests.
Because the costs associated with a license can vary greatly depending on the institutions and product categories being sought, CLC encourages companies to do a thorough cost analysis based on the specific institution/product licenses they wish to acquire.
The following chart demonstrates the range of potential costs associated with becoming a local or standard licensee and can be used as a general reference guide in assessing the business opportunity of becoming a collegiate licensee. The most effective way to reduce costs is to limit the number of institutions requested to those that a company can immediately maximize and market. In addition to the initial costs outlined below, companies should also consider the additional expense of marketing a product via advertising, trade shows, sales commissions, sample production, and internal administrative expenses.
APPLICATION & ADMINISTRATIVE FEES
Please review the cost chart above to determine the application fee that will apply for the license type your company is seeking. This one-time fee will not be refunded, even if a company applies for a Standard License and is only approved for a Local License. A CLC administrative fee is not charged during the first year as a licensee, but will be assessed upon renewal every year thereafter. Standard and local licensees are required to pay $1,000 and $100 annual administrative fees, respectively. Additional administrative fees may be assessed each year at renewal if a company fails to comply with the terms of the CLC License or Labor Code Agreements.
ROYALTY ADVANCE FEES, ROYALTY RATES, AND MR/Us
The vast majority of institutions charge annual advance fees to all standard and local licensees. These advance fees are used as a prepaid credit balance against future royalties due on an institution-by-institution basis. Unused prepaid balances are retained by the institutions and, therefore, are not carried from one year to the next. Each institution also has a royalty rate or minimum royalty per unit (MR/U) that is used in calculating the royalty payments. In the majority of cases, these royalty rates are charged against the final wholesale invoice price charged to the retail customer, although unique royalty arrangements may apply depending on a company’s distribution strategy. CLC requires all licensees to submit royalty reports online through MyiCLC, CLC’s online license management system. All royalty payments are made to CLC on either a monthly (Standard) or quarterly (Local) basis, depending on the license type. The royalty rates and advance fees for all CLC institutions are provided in the license application package.
MyiCLC is CLC’s free Internet-based license management system. Once approved for a license, licensees are required to submit all artwork, license requests, and royalty reports through MyiCLC. Additionally, CLC routinely uses MyiCLC to communicate to applicants/licensees. It is imperative that applicants check MyiCLC and email regularly throughout the application process for correspondence and communication from CLC’s staff. Current licensees should check MyiCLC and email for information regarding licensing requests, artwork submissions, and news from CLC. Please review the MyiCLC Registration Form included in the application packet for the technical requirements for using the MyiCLC system.
Licensees are required to report royalties by license type (i.e., standard, local, bowl, conference, national champions, special program), institution, product category, and retail location. Total units sold, gross sales, royalty-bearing sales, and units that require a minimum royalty per unit (MR/U) must be included for each transaction.
Royalty reports must be submitted through MyiCLC, which allows licensees to manually enter the required sales information each reporting period or upload sales information in a formatted CSV file utilizing license type, institution, product category, and retail codes as provided by CLC. The MyiCLC system will calculate total royalties due and generate a payment voucher. Reports and payments must be received by CLC by the 20th of the month following the end of the reporting period.
Due to the detailed royalty reporting requirements of CLC, you should ensure your company’s invoicing and sales systems can compile and, if possible, export the required sales information into the CSV format required. Uploading royalty reports rather than manually entering the sales information is the most expeditious way to report royalties to CLC.
All licensees are required to obtain at least $1 million of product liability insurance, although some higher liability products may require as much as $5 million worth of coverage. As indicated by the First Year Licensing Costs chart, this can be a substantial expense depending on how much insurance a company already has in place. For many applicants, securing proper insurance is the most time-consuming and challenging of all application requirements. A detailed description of CLC’s insurance requirements is provided in the license application package.
CORPORATE RESPONSIBILITY AND LABOR CODE FEES
Many collegiate institutions have Codes of Conduct for corporate responsibility requirements. In addition, if the university is a member of the Fair Labor Association, licensees will be required to register with that organization in the appropriate category that applies to that business. Additional information regarding the Workplace Code of Conduct and FLA classifications, fees and requirements can be found in the license application package.
One of the most recognized licensed product authenticators in the licensing business is CLC’s “Officially Licensed Collegiate Products” (OLCP) label. Each year, this label is affixed to more than 100 million collegiate products in the U.S. It serves as a quality seal of approval in representing the authenticity of licensed products for CLC partners. Standard and local licensees are required to order OLCP hologram labels or hangtags and affix them to all licensed items featuring the marks of CLC-represented institutions. More information on the hologram-labeling program can be found at www.jpattonondemand.com.