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What's in a name? Money!

By Surajeet Das Gupta in New Delhi
April 15, 2009 10:20 IST
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Cricket icon Harbhajan Singh is all set to star in a chain of Indian restaurants to be called Bhajji Da Dhaba.

Harbhajan (Bhajji is his nickname) is tying up with Delhi-based Licence India, which specialises in leveraging individual brands, and is looking at using Harbhajan's popular image to set up a line of sportswear, restaurants and even cricket academies under his brand name. The company will now approach investors who want to run restaurants under Bhajji's brand name.

Licence India has also tied up with management guru Shiv Khera and is in talks with fashion designer Nita Lulla for similar deals (for use of her brand for jewellery, watches and so on).

Individual licensing is the newest opportunity on the Indian scene.

It involves paying stars or icons in various fields for licensing their names for a range of businesses -- from restaurants to jewellery and apparel lines. Not to be confused with stars who leverage their names to invest in businesses -- such as the restaurants owned by Sachin Tendulkar, Sourav Ganguly and Kapil Dev -- this business involves no investment from the star concerned.

"Individual licensing is a $10 billion business globally but is still in its infancy in India," said Gaurav Marya, president of Licence India, adding, "But we expect it to become a $200 million business in a few years."

Licence India, which is part of the Franchise India group, is one of the country's largest integrated franchise solution companies. With over 62 offices and a global tie-up with US-based Francorp, one of the world's largest franchise consultancies, it also helps global brands to come to India.

The idea behind licensing celebrity brands is simple. Celebrities like Harbhajan have a brand salience that goes much beyond cricket. The new idea is to leverage the popularity of his personal brand values for product lines that are either not related to the celebrity's 'core competence' or in which he or she has not ventured earlier.

The same goes for Shiv Khera. His popularity goes much beyond top corporate executives who hear him at leadership summits and lecture sessions. He inspires millions of readers globally with his best sellers, whether it is You Can Win which sold over 100 million copies or Freedom Is Not Free, which has caught the imagination of younger aspiring executives.

Licence India is creating a brand licence plan for Khera that includes having his portrait or the title of his books embossed on stationery, coffee cups, writing pads, pens and cups and even for a management institute. And if all goes well, you might even see Shiv Khera stores across the country selling products ranging from books to stationery.

Sportswear major Reebok has experimented with fashion designer Manish Arora to come out with designer sports shoes under the brand name Fish Fry.

"Manish Arora does two lines a year for us. His collections are then put on display in Paris. This initiative helps bring traction to the brand and makes for a good business sense for us. We have also launched a few specialised stores for the product in some cities," said Subhinder Singh Prem, MD, Reebok India.

How does the licence agreement work?

The celebrity providing the name is paid a certain licence fee annually by the licensee that uses it. In some cases, the celebrity could also be a shareholder in the company or a retail outlet in which the name being used in lieu of an annual payment.

In some cases, the celebrity gets paid on a revenue-share basis. The guiding principal, however, is that the celebrity does not risk his own capital in the venture.

Individual licensing is also different from run-of-the-mill celebrity endorsements in the celebrity's status is used to validate the brand of some other product or company.

The reason this arrangement works for licensees is that it allows for instant brand creation. Manufacturers of, say, stationery items or garments that mostly export find it difficult to create a brand to sell in the domestic market.

"For a manufacturer of stationery items brand-building will require him to make large investments to build a brand like, say, Archie's or Hallmark. A licence agreement gives him access to a well-known celebrity brand and allows him to charge a premium," said a senior executive of a leading retailing outfit.

Globally celebrities like golfer Greg Norman, boxer Muhammed Ali and even a small clubs like Santa Barbara Polo (remember its famous luggage brand?) have licensed their names and brands for millions of dollars. Given the speed with which India catches up with global trends, domestic celebrities can't be far behind.

Additional reporting Ashish Sinha.
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Surajeet Das Gupta in New Delhi
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