As the licensing program coordinator for your school, you evaluate proposals from vendors who want to make or sell merchandise with the school’s name, logo, or mascot. If you find the product acceptable, the vendor pays a $250 licensing fee and then 6.5% of the wholesale cost of the merchandise manufactured (whether or not it is sold). The licensing fee helps to support the cost of your office; the 6.5% royalty goes into a student scholarship fund. At well-known universities or those with loyal students and alumni, the funds from such a program can add up to hundreds of thousands of dollars a year.

On your desk today is a proposal from a current student, Parker Winston.

The design and product are acceptable under your guidelines.
However, you’ve always enforced the fee structure across the board and you see no reason to make an exception now.
Whether the person trying to sell merchandise is a student doesn’t matter; your policy is designed to see that the school benefits whenever it is used to sell something. Students aren’t the only ones whose cash flow is limited; many businesses would find it easier to get into the potentially lucrative business of selling clothing, school supplies, and other items with the school name or logo if they got the same deal Parker is asking for. (The policy also lets the school control the kinds of items on which its name appears.) Just last week, your office confiscated about 400 t-shirts and shorts made by a company that had used the school name on them without permission; the company has paid the school $7,500 in damages.
Write a letter to Parker rejecting their special requests. They can get a license to produce the t-shirts, but only if they pay the $250 licensing fee and the royalty on all shirts made.

Transcribed Image Text:

I want to silk-screen and sell t-shirts printed with the name of the school, the mascot, and the words "We're Number One!" (A copy of the design I propose is enclosed.) I ask that you waive the $250 licensing fee you normally require and limit the 6.5% royalty only to those t-shirts actually sold, not to all those made. I am putting myself through school by using student loans and working 30 hours a week. I just don't have $250. In my marketing class, we've done feasibility analyses, and I've determined that the shirts can be sold if the price is low enough. I hope to market these shirts in an independent study project with Professor Doulin, building on my marketing