Licence royalty (redevance de licence)
A periodic fee paid by a licensee to the owner of intellectual property — trademark, software, patent — for the right to use that asset. In a group context, licence royalties are a standard tool for transferring value from operating entities to the IP holding company.
In practice
Setting the royalty rate at arm’s length is critical: too high and it erodes the operating company’s margins; too low and the IP company’s profit fails to attract preferential treatment. Transfer pricing rules (OECD guidelines) require benchmarking against comparable licences in the market. In a franchise group, the brand licence and the software licence are often billed separately to create clean, auditable revenue streams.