Sell-off periods, renewals, and termination

Every license ends eventually. How it ends matters: whether you can sell leftover stock, whether you can renew, and what happens if either side breaks the contract. These clauses protect you from being stuck with inventory you cannot legally sell.

Sell-off period. After a license expires, many contracts allow a short sell-off period, often a few months, to sell remaining inventory. Conditions usually apply: no new production, royalties still due, sales only through normal channels, and sometimes no deep discounting. If the license is terminated for breach, the sell-off right may be lost entirely.

Renewals. Some licenses include a renewal option if you meet sales targets or pay a new MG. Others require a fresh negotiation. Do not assume a renewal will be offered, even if your sales were good.

Termination. Licensors can usually end a deal early for serious breaches, such as unpaid royalties, selling unapproved products, selling outside the territory, or insolvency. Some contracts also allow termination if you fail to launch by a deadline. Read these clauses carefully, and consult a licensing attorney if the terms seem one-sided.