royaltybasis
Royalty basis is the metric used to determine royalties payable under licensing agreements for intellectual property, technology, brand use, or content. It defines what amount the royalty rate is applied to and can significantly affect the total cost for the licensee and the revenue for the licensor. The term is common in licensing, franchising, and publishing contexts and is established by the contract between parties.
Common bases include net sales, gross sales, revenue, or per-unit quantities. Net sales or net revenue typically
Calculation examples illustrate the concept. If a license provides a 5% royalty on net sales and net
Practical aspects include reporting and payment schedules, typically quarterly, and the need for accurate accounting to