Trademark valuation
Trademark valuation is the process of determining the value of a trademark, taking into account the unique attributes of the brand and the specific goals of the valuation.
Our team consists of individuals who specialize in trademark valuation, ensuring that each individual valuation is conducted by experts. We understand that every trademark is unique, and we tailor our valuation approach to each specific case.
Why you need to know the value of your trademark
Your trademark is not only a key asset in financial statements but also plays a vital role in transactions involving the trademark, mergers, company splits, and making informed investment decisions. Trademark valuation is essential when transitioning to a franchise model, as it helps determine the licensing fee for franchisees. There are various types of trademark valuation, such as technical valuation for financial and tax purposes, and commercial valuation, which focuses on brand management and building brand architecture. Understanding the value of your trademark ensures strategic decision-making and effective brand management.
Trademark valuation for Financing, Collateral
Can I get financing?
Trademark valuation can be used to obtain financing or collateral. This process involves assessing the value of the trademark, which can be presented as an asset to secure additional financial resources or as collateral for lenders. Valuation for financing or collateral purposes may include an analysis of various factors such as brand recognition, reputation, market position, customer loyalty, growth potential, and profitability.
Trademark valuation for Purchase Price Allocation
I bought the company, but what’s the value of the trademark?
Trademark valuation for purchase price allocation refers to determining the value of a trademark in the case of an acquisition or merger. The primary objective is to determine what portion of the purchase price should be allocated to the trademark from an accounting perspective. Valuation methods and techniques, such as comparative analysis, income forecasting, or replacement cost analysis, are used to determine the trademark’s value. This value is then considered when allocating the overall purchase price of the company among various asset components, such as real estate, equipment, inventory, and the trademark itself. Valuation for purchase price allocation helps establish a fair and reliable value for this asset, which is crucial during acquisitions or mergers and for proper financial reporting of the transaction.
Trademark valuation for Transfer Pricing
I need to transfer my trademark to another company
Trademark valuation for transfer pricing refers to determining the value of a trademark in transactions between related entities, such as subsidiaries or sister companies. The main goal is to establish an appropriate price at which the trademark is transferred between these entities. Valuation for transfer pricing aims to ensure fairness and compliance with tax requirements and to avoid improper pricing practices between related entities. Proper trademark valuation allows for establishing an appropriate transfer price that aligns with market conditions and avoids conflicts with tax authorities. Valuation for transfer pricing is crucial for businesses operating in an international environment with transactions between related entities, ensuring transparency and compliance in transfer pricing and minimizing the risk of tax disputes and sanctions for improper trademark valuation in such transactions.
Trademark valuation for Liquidation
How much do I get if I sell it now?
Trademark valuation for liquidation refers to determining the value of a trademark when a business is ceasing operations or undergoing liquidation. The main objective is to establish the value of the trademark for potential sale or other uses during liquidation. The value determined during liquidation valuation can guide decisions regarding the further use or sale of the trademark. It may also be considered when distributing the company’s assets among shareholders or creditors during the liquidation process. Valuation for liquidation is important for business owners and managers as it helps determine the asset’s value and make appropriate decisions for optimal use during the liquidation process.
Trademark valuation for Impairment Test
I need a fair value for my balance sheet
Trademark valuation for impairment tests refers to determining whether the value of a trademark has decreased due to specific factors such as market changes, reduced demand for products or services associated with the brand, or other factors negatively impacting its value. The impairment test aims to establish whether the trademark’s book value exceeds its recoverable value, which means future cash flows generated by the trademark estimated based on financial forecasts and market analysis. If the book value exceeds the recoverable value, the trademark may be impaired, and an impairment loss must be recorded in the company’s financial statements.
Trademark valuation for Licensing Fees Trademark Valuation
How much do I get for licensing my trademark?
Valuation of a trademark for licensing fees concerns determining the value at which another company or entity can obtain a license to use the given trademark. This is important when the trademark owner decides to grant licenses to other entities to utilize their brand. Various factors are considered during valuation for licensing fees, such as brand value, recognition, reputation, popularity, market position, customer loyalty, and potential benefits for the licensee from using the trademark. Valuation aims to determine a fair and adequate value that licensees should pay for the right to use the trademark. The brand owner can use this valuation to negotiate the licensing agreement and establish appropriate licensing fees that reflect the trademark’s value and potential. It is important to consider both the brand owner’s perspective and the benefits the licensee may gain from using the trademark during the valuation for licensing fees. Proper valuation ensures fair and balanced terms of cooperation within the licensing agreement.
Trademark valuation for Fairness Opinion
Is it a fair price?
Valuation for fairness opinion refers to assessing the fairness and equity of a transaction involving the acquisition, merger, or other types of transaction where a trademark is a significant asset. A fairness opinion is issued by an independent expert or consulting firm to provide an objective opinion on the fairness of the transaction terms. In the context of trademark valuation for fairness opinion, the expert analyzes the trademark’s value and its contribution to the overall transaction value, considering factors such as growth potential, market position, competitiveness, future profit prospects, and risks associated with the trademark. This valuation helps ensure transparency, fairness, and compliance with legal regulations in transactions where the trademark plays a crucial role, supporting investment decision-making and protecting the interests of all transaction participants.
Trademark valuation for Legal Proceedings
How do I defend it in court?
Trademark valuation for legal proceedings refers to determining the value of a trademark in the context of court disputes, such as disputes over copyright infringement, trademark rights, or licensing agreements. In legal proceedings, valuation aims to provide objective data and expertise that serve as evidence or the basis for resolving the dispute. It is often conducted by independent experts or court-appointed specialists with knowledge of trademark valuation and its value. Valuation for legal proceedings must adhere to relevant standards and principles accepted in the legal system. Its goal is to provide objective data and analysis for the court to make decisions regarding compensation, damage repair, cessation of violations, or other forms of dispute resolution. The value determined during valuation can significantly impact the court’s outcome and the compensation awarded to the injured party. Therefore, it is important to conduct the valuation reliably, according to standards, and based on credible data and expertise.
Trademark valuation for Tax optimization
Can I review my tax options?
Trademark valuation for tax optimization refers to determining the value of a trademark to optimize the tax burden for the company. It is often used in transactions between related entities, where there is an opportunity to shift profits and costs associated with trademark use to reduce taxes. Tax optimization related to trademark valuation may also involve various transactional structures, licensing agreements, and tax strategies to minimize tax burden and maximize financial benefits from trademark use. It is important to conduct the valuation according to tax guidelines and be aware of potential tax consequences related to such optimization. Valuation for tax optimization aims to increase the company’s tax efficiency while ensuring compliance with tax laws and ethical standards, providing alignment with tax regulations.
Your goals and needs guide the direction of our collaboration.
Our approach to trademark value
The conclusion of the valuation process is the delivery of a professional valuation report for the trademark. What are the steps to achieve it?
Gather information related to the trademark
Price offer for the service
Cooperation agreement and NDA
Sending necessary documents
Clarifying information contained in the submitted documents
Conducting the valuation process
Providing a draft version of the valuation report
Corrections to the report based on any feedback from the company
Presentation of the final report along with a discussion of the results
Trademark valuation process results in a valuation report
What does it contain?
The final report includes key elements such as:
- Purpose of the valuation
- Value standard
- Description of the adopted methodology
- Business model description
- Competition/market analysis
- Cash Flows forecasts
- Valuation of the trademark
- Scenario analysis
- Sensitivity analysis
- Graphical presentation of financial data
- Market environment description
- Risk analysis related to the valuation
Just developing your brand or registering your trademark?
Trademark registration is a crucial step in establishing ownership of your brand, name, or logo. Registering a trademark ensures trademark owner’s protection for the remaining useful life of the trademark. Your brand is safeguarded from unauthorized use by third parties. With that protection a trademark can be used only with your consent. With a registered trademark, you gain sole authority over your brand, allowing you to use, sell, gain economic benefits and modify it as you see fit. You can learn more about the value in an article What Is a Realistic Value and Purchase Price?
This protection extends beyond just names and logos; it can include the shape of items, their packaging, and even color combinations that distinguish your goods or services from others. By registering your trademark, you equip yourself with the necessary tools to prevent others from benefiting unfairly from your intellectual property and ensure that your brand is also one of the intangible assets of your company.
Methods of business valuation
Valuation of trademarks can be done using various approaches to determine the value of a trademark, each with its distinct basis and application.
Examples include:
Price Premium: Price premium refers to the additional amount customers are willing to pay for a branded product compared to a similar product without a recognizable trademark. It represents the difference between the price of the branded product and the price of the unbranded equivalent.
Relief from Royalty Method: This method estimates the value of a trademark’s owner by calculating the hypothetical royalties that would need to be paid if the company did not own the trademark and had to license it from a third party using royalty rate. It is most commonly used to determine the price for use of the trademark license
Income approach: These methods rely on present value of future cash flows allocated to the trademark. This approach is similar to the company valuation using the income approach.
Cost approach: These methods are based on the historical costs incurred to create the trademark. The trademark's value is calculated based on the costs required to replace it with a new one or to recreate it entirely. This approach is similar to the company valuation using the asset-based approach.
Cost of Reproduction: The cost of reproduction method estimates the value of a trademark based on the expenses required to recreate the trademark from scratch. This includes all costs associated with developing the brand to its current market position, such as marketing, advertising, and design expenses.
Capitalization of Brand-Attributed Expenditures: The capitalization of brand-attributed expenditures method involves determining the value of a trademark by capitalizing the expenditures directly associated with building and maintaining the brand. This includes ongoing marketing, promotional activities, and any other costs incurred to enhance the brand’s market presence and recognition.
Market Transaction Comparisons: The market transaction comparison method determines the value of a trademark by comparing it to similar trademarks that have been sold or licensed in the market. This approach analyzes known transaction parameters such as sale prices, licensing fees, and market conditions to establish a fair value based on comparable trademark deals.
Market approach: These methods determine the trademark's value by comparing it with other brands that have been sold on the market, using known transaction parameters. This comparative analysis helps establish a fair market value based on similar trademark sales. This approach is similar to the company valuation using the market approach.
The best valuation method for your trademark depends on its nature and your specific goals. That is why we always want to make sure that we understand your needs as well as specifics and financials of your trademark.
FAQs in valuation services
The valuation of a trademark is a service, and as is well known, service prices can vary. The price depends on the purpose of the valuation and the chosen method, as well as the complexity of the trademark. Prices can start from 4,000 euros depending on a chasem method of valuation.
The process of valuing a trademark takes 2-3 weeks from the moment we receive the necessary documents. In the case of a complex valuation, this process may take longer. We can present a preliminary value range within 1-2 weeks of receiving the documents.
More information about business valuation and its various aspects can be found on the blog. We also provide information on company valuation, for example Company Valuation: 5 Essential Methods for Valuing Your Company
The more detailed the data we have, the more accurately we can determine the value of the company.
The most commonly required data is:
- Financial statements from recent years
- Revenue forcasts
- Company plans and forecasts
- Description of the sources of trademark’s revenues and the industry/niche in which the company operates
The scope of necessary information may expand due to the specific nature of the trademark.
Our clients
