Retailers are typically required to obtain special licenses to sell trademarked or brand-name clothing. Licensing agreements vary by brand and company. Some brands require retailers to execute licensing agreements limiting them from marking down or marking up their merchandise. Furthermore, some brands prohibit retailers from selling merchandise made by competitors. A retailer interested in carrying brand-name clothing must contact each company directly, comply with a company’s licensing requirements, sign a written agreement outlining its legal duties as an authorized retailer and agree upon a share of profits or royalties.
Find the brand-name company owner’s address. You need the corporate address so that you can send a written licensing agreement directly to the corporate headquarters. You also need to understand the domiciliary laws that the corporatation must comply with. You can find this information by conducting a Dun & Bradstreet search or by contacting a state’s secretary of state office. You need to know the company’s home location or state of corporate domicile, which you can determine by looking at the company’s public filings or initial registration.
Search the company’s U.S. Securities and Exchange Commission (SEC) public filings. The SEC requires annual disclosures of publicly traded companies. Most brand-name clothing owners have offered their stocks for public purchase. You can use the electronic EDGAR database located on the SEC’s website to determine the corporation’s net worth and review whether the corporation’s trademark is financially viable. Have a certified public accountant review the corporation’s earnings statements.
Send a request for proposal or request for additional information to the brand-name clothing company that you are interested in selling clothing for. Most large brand-name companies offer information on becoming licensed to sell their clothing brands. Mail your proposal package directly to the corporation or, if the company allows, submit it electronically.
Review the company’s website. Most companies list additional information on their public websites. A company’s additional information may include the initial investment required, no-compete clauses and minimum purchasing requirements.
Find an attorney to draft your licensing agreement. Your attorney should have specialized expertise in dealing with contract issues, business ownership issues and intellectual property rights. Many companies also use standard licensing agreements prepared by corporate counsel. If this is the case, you need your own attorney to review the written licensing agreement. You may want to add language or tailor it to your specific situation.
Comply with the federal registration requirements required by the Federal Trade Commission in registering your apparel.
You may consider self-manufacturing the clothing before affixing the brand-name retailer’s label, logo or insignia, instead of licensing clothing already made by other manufacturers. By manufacturing your own clothing, you may be able to keep more of your profits and avoid the pitfalls of securing an adequate supply of merchandise from distributors.
The Federal Trade Commission issues a Registered Identification Number to all domestic companies that sell apparel covered by the federal Textile, Wool and Fur Act. You may have to apply for an RN.