What is the purpose of a licensing agreement?

A licensing agreement serves as a legal contract that allows one party to use intellectual property, such as a concept or trademark, owned by another party. The central purpose of this agreement is to facilitate the sharing of that intellectual property while outlining the rights and responsibilities of both parties involved. This ensures that the owner of the concept or trademark retains control over how it is used, and it also establishes the terms under which the licensee can operate, including duration, scope, and any financial arrangements such as royalties or licensing fees.

By using a licensing agreement, the owner can expand the reach of their concept or trademark without relinquishing ownership, while the licensee gains access to established branding or innovative concepts that can help their business.

The other options focus on aspects that may be part of business processes but do not encapsulate the primary intent of a licensing agreement. Selling a concept for profit, evaluating market potential, or defining financial boundaries are important elements of business strategy but do not specifically address the legal and practical framework established by a licensing agreement.