Pulling the plug on a collaboration before it has run its course will generally be a last resort, carrying with it the implicit and very public admission that the collaboration has failed, and potentially damaging both brands. However, it is essential to have the right to do so where continuing with the collaboration would cause more harm than good.
In some cases, it will be important to publicly distance your brand from the other, for example if allegations emerge of serious discrimination, child or slave labour within the supply chain or a product recall. In addition to the standard rights to terminate a contract where the other party has committed a material breach of its terms or has become insolvent, both brands will want to ensure that they have the right to bring their association to an end if they believe that continuing it would have an adverse impact on their brand.
In most agreements this would be considered too subjective to form the basis of a termination trigger, but when the enhancement of brand reputation is one of the primary goals (if not the whole purpose) of the agreement, it is a must.
As well as the termination triggers, the agreement should set out the consequences of termination. For example, if the collaboration is content-focused, what should happen to that content – should it be deleted, and if not, to what extent can it be used again by either party?
By outlining these consequences, the parties will have clarity as to what their post-termination obligations are, which will help to provide stability and guidance when the collaboration ends.
There are risks associated with any commercial arrangement, and brand collaborations are no different. However, when managed properly with sensible drafting at the outset, a collaboration with a well-aligned or complementary brand can be a brilliant way to reinvigorate your brand's identity, expand its reach using new platforms or generate revenue in new markets.
At Foot Anstey we play an active role in the retail marketplace, flexibly supporting a range of high-profile clients with advice on brand and other intellectual property licensing arrangements, including collaborations. If you would like to any further information, please get in touch.