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Co-branding is a pairing of two or more branded products to form either a separate and unique product or brand; the use of distinct brands in combination with market-related products for complementary use, such as between a fast food chain and a toy company; or even physical product integration, such as a brand-name toothpaste combined with a brand-name mouthwash. A co-branding strategy can be a means to gain more marketplace exposure, fend off the threat of private label brands and share expensive promotion costs with a partner. In a co-branding relationship, both brands should have an obvious and natural relationship that has potential to be commercially beneficial to both parties.
The rights, restrictions and obligations of a co-branding strategy are implemented through a co-branding agreement that is binding on both parties. A co-branding agreement contains many important provisions and must be carefully drafted to protect the parties, as well as clearly provide the parameters of the relationship. In general, a typical co-branding agreement includes provisions covering branding specifications, market plan strategy, licensing specifics, payments and royalties, representations and warranties, term and termination, confidentiality, indemnification and disclaimers.
Among these areas, the most important provisions tend to relate to exclusivity, term and termination, licensing specifics, liability, the co-branding partners and branding and marketing specifications.
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