A Guarantee is the minimum Royalty Payment that a Licensee is contractually obligated to pay a Licensor over the term of the agreement. Guarantees may be paid one time, quarterly, semi-annually or annually (custom payment schedules can be created), are nonrefundable and can be credited against future Earned Royalties in the form of an Advance.
RoyaltyZone provides an easy way to enter, monitor, and enforce advances and guarantees. In this tutorial, we will show you how to enter multiple Advances or Guarantees for specific properties, categories, territories, or distribution channels.
We’ll create two unique guarantees: $50,000 over the life of the agreement for sales in the USA, and $25,000 over the life of the agreement for sales in Canada. Use the same techniques to define specific properties, categories, territories, or distribution channels to any term in RoyaltyZone.
1. Click "New Guarantee" on "Step 8 – Advances / Guarantees" of the new agreement entry process
2. Enter a name for the first term, the USA guarantee(Examples = USA, USA MG, etc.)
3. Use the Start Date and End Date to define the effective period of the term. Use the default setting for the life of the agreement.
4. Use the default setting to allow the licensee to recoup guarantee payments against earned royalties, then click "Create"
5. Select the payment due date (use the agreement end date if due over the life of the agreement)
6. Enter the full amount of minimum guarantee – in this case, $50,000
7. Enter descriptive text to help explain the payment to the licensee. The description will appear on the invoice.
8. Click "Create" to save the payment milestone, then click "Next" to proceed
9. Associate the appropriate rights, then click "Save". In this case, we want to select all Properties, Categories, and Distribution Methods, but only the "United States" Territory. (Associations are used to determine when a particular term is applied to a sales transaction)
10. One down, one to go! Click "New Guarantee" to enter the Canada guarantee. (Note: you can also use the "Clone" action to duplicate and edit the first term)
11. Enter the name and effective dates for the Canada guarantee
12. Enter the payment milestone of $25k for the Canada guarantee. Click "Create", then "Next" to proceed.
13. Associate the appropriate rights, then click "Save". In this case, we want to select all Properties, Categories, and Distribution Methods, but only the "Canada" Territory. (Associations are used to determine when a particular term is applied to a sales transaction)
14. Success! Use the Actions icons to edit, delete, or clone any the entered terms
1. Triangle: show/hide the rights associated to the term
2. Pencil/Edit: change the name, dates, or recoupabilty
3. Lego/Edit: change the associations
4. Calendar/Edit: edit, add, or remove payment milestones
5. Delete: remove the term
6. Clone: make a carbon copy of the term for easy entry of multiple terms
