This template is a starter framework for educational purposes only. It does not constitute legal advice and should not be executed without review by a qualified Australian commercial lawyer. IP licensing arrangements have significant financial and legal implications. Seek professional legal advice before entering any licensing agreement.
A licensing agreement is the primary commercial instrument through which IP owners generate recurring income from assets they have built without replicating the effort of delivering the underlying service. This template provides the structural framework for a standard IP licence. Each clause requires completion specific to your arrangement.
A well-structured licensing agreement does three things: it clearly defines what the licensee can and cannot do with your IP; it creates a documented, recurring income stream; and it preserves your ownership and ability to enforce or terminate.
Parties
Licensor (IP Owner)
Full legal name: [Insert full legal name of business or individual]ACN/ABN: [Insert] Address: [Insert registered address]
Licensee (Permitted User)
Full legal name: [Insert full legal name of business or individual]ACN/ABN: [Insert] Address: [Insert registered address]
1. Grant of Licence
The Licensor grants to the Licensee a [non-exclusive / exclusive / sole] licence to use the Licensed IP described in Schedule 1 of this Agreement, for the Permitted Purpose, within the Territory, for the Term, subject to the conditions set out in this Agreement.
Permitted Purpose: [Describe specifically how the licensee may use the IP — e.g., "to operate a food service business under the [Brand Name] system within the defined territory"]
2. Territory
The licence granted under this Agreement is limited to: [Insert geographic territory — e.g., "the State of Queensland, Australia" or "Australia-wide" or a specific suburb/postcode range].
3. Term and Renewal
This Agreement commences on [Insert commencement date] and continues for an initial term of [e.g., 3 years], unless terminated earlier in accordance with this Agreement. The parties may renew this Agreement for a further term of [Insert renewal period] by written agreement no less than [60/90] days before expiry.
4. Royalties and Fees
Initial Licence Fee
The Licensee shall pay to the Licensor an upfront licence fee of $[Amount] on execution of this Agreement.
Ongoing Royalty
The Licensee shall pay to the Licensor a royalty of [X]% of [Gross Revenue / Net Revenue — define clearly] generated through the use of the Licensed IP, payable [monthly / quarterly] within [14/30] days of the end of each period, accompanied by a royalty statement in the form set out in Schedule 2.
Minimum Annual Royalty
Notwithstanding actual revenue, the Licensee shall pay a minimum annual royalty of $[Amount] per year. Where actual royalties paid fall below this minimum, the Licensee shall pay the shortfall within 30 days of year end.
5. Quality Control and Standards
The Licensee acknowledges that the value of the Licensed IP depends on consistent quality and presentation standards. The Licensee agrees to: (a) comply with all standards, manuals, and guidelines provided by the Licensor from time to time; (b) permit the Licensor to inspect operations and records on reasonable notice; (c) not use the Licensed IP in any manner that may damage the reputation or goodwill of the Licensor.
6. Ownership of IP
All Licensed IP remains the exclusive property of the Licensor. This Agreement does not transfer any ownership of the Licensed IP to the Licensee. Any improvements, modifications, or derivatives created by the Licensee using the Licensed IP shall be [owned by Licensor / jointly owned — choose and define].
7. Confidentiality
The Licensee agrees to keep all Licensed IP, operational materials, pricing, and business information provided by the Licensor strictly confidential and not to disclose it to any third party without prior written consent. This obligation survives termination of this Agreement for a period of [3/5] years.
8. Termination
Either party may terminate this Agreement by written notice if: (a) the other party materially breaches this Agreement and fails to remedy the breach within 30 days of written notice; (b) the other party becomes insolvent, is placed in administration, or ceases to carry on business. The Licensor may terminate immediately upon written notice if the Licensee uses the Licensed IP outside the Permitted Purpose or in a manner that damages the Licensor's brand or reputation.
Schedule 1 — Description of Licensed IP
[Describe the specific IP being licensed in sufficient detail to be unambiguous. Include: registered marks and registration numbers; documented systems or manuals (by name and version); any software, content, or materials included; what is explicitly excluded from the licence.]
Before you execute: Have a commercial lawyer review this agreement. Confirm the IP you are licensing is properly documented in your IP Asset Register. Ensure your registered IP protections (trademarks, etc.) are current. Establish a royalty reporting template before the agreement commences.