What are the Challenges Associated with Royalties?
Despite the benefits, there are also challenges:
Enforcement: Ensuring that the licensee complies with the terms of the agreement. Valuation: Accurately determining the value of the asset and the appropriate royalty rate. Contract Complexity: Crafting a comprehensive licensing agreement that covers all potential issues. Revenue Fluctuations: Royalties are often tied to the licensee's revenue, which can fluctuate.