For an outside innovator with a finite number of buyers the innovation, this paper compares two licensing schemes: (i) fixed fee, in which licensee pays fee to and (ii) ad valorem profit royalty, leaves fraction its innovator. We show these schemes are equivalent that for any licenses puts sale, give same revenue. obtain equivalence result general model minimal structure. It is then applied Cou...

The present article contains a description of a new method of royalty calculation based on analysis of risk decrease generated by franchisor’s intellectual assets transmitted to franchisees.