Assessment of the royalty rate or financial value of a brand. Intervention in acquisition contexts, setting royalties with third parties or intra-group (transfer pricing), litigation, and within an accounting framework.
Brand valuation, or determining its market royalty rate, involves assessing its financial value based on the economic benefits it provides.
It is required in various contexts: disposal/acquisition, pledging, PPA, setting royalties, restructuring, or in the event of damages.
Brand valuation is based on an analysis of its own economic contribution, depending on the context, its characteristics, and the information available.
Analysis of positioning, brand awareness, competitive advantages, and the brand's contribution to the company's activity and results. In particular, SORGEM has developed a proprietary valuation method recognised by the market.
Application of appropriate methods: royalty based on market rate analysis, excess earnings, or cost of creation or replacement.
Analysis of the value specifically attributable to the brand, in particular using the SORGEM allocation matrix (proprietary method) when an excess earnings approach is used.
Presentation of the work, assumptions, and conclusions in a structured report.
The value of a brand can be assessed based on the economic benefits it is expected to provide its owner in the future (royalty and excess earnings methods) or using a replacement cost approach.
The royalty rate can be assessed by comparing the estimated value of a brand according to dedicated methods (comparable market royalties, excess earnings method, cost approach) with the business plan of the activity.
This is a proprietary method developed by SORGEM and widely recognised by the market, used in the excess earnings approach to assess the share of earnings attributable to the brand relative to the company’s other assets. It is consistent with OECD valuation expectations.
Brand valuation is required in various contexts: disposal/acquisition, pledging, PPA, setting royalties with third parties or intra-group, restructuring, or in the event of damages.
Analysis linking the brand's characteristics to its actual contribution to the company's revenue and profitability.
Use of market data and relevant comparables to assess royalty rates and valuation levels.
Structured, documented work that can be used in transactions, royalty negotiations, accounting documentation, or litigation.
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