I am wondering if anyone can give the downside to a non-exclusive license agreement.
My company has a nationally known product in which I invented a couple years ago. We have broad distribution all over the country, however there are several retail giants that will not put in the effort to take on a one product company(which we are). Due to this problem, I researched several ways to get it into these retailers, one being a license agreement with a company that already takes a product line into these stores. I have everything set up, all I have to do is sign the agreement and we are in. This will get me right into Autozone, Advance Auto, and O`reilly.
The advantages that I see in this is that I have been unsuccessful in getting into these retailers, the free publicity of being in those stores, royalties for not doing anything, and with the quantities that we would be talking about would bring down my manufacturing cost substantially. What I don`t know is the disadvantages.
This would be a non-exclusive agreement, meaning I can sell everywhere else besides the above mentioned retailers.
Does anyone have any input on the disadvantages of this type of agreement?
Thanks in advance!
President - 3R Products, Inc.