This week, the much anticipated Forever 21 x Taco Bell collection finally dropped. Taco Bell fans throughout the world were clearly impressed and most of the collection sold out within a day. Although the collaboration has been a major success some people questioned the connection, and wondered why Taco Bell would license its marks and name to the fast-fashion company.
Behind any collab is a licensing agreement where a well-known brand gives a third-party rights to use its trademarks or tag lines on products. Many things must be discussed when it comes to these types of agreements, and both parties have a lot to gain or lose. In the ideal situations, both brands fulfill their end of the contract and grow into new markets, but things can go wrong and end up damaging the licensor’s brand.
Besides the royalty rate, the parties have to decide what rights are being granted, the duration, the territory, the products, the distribution restrictions, and any other conditions, like quality control. Most of these terms are standard terms that a lot of contracts cover, but the grant of rights and quality control are especially important in collabs like this one.
So it is very important to note that Taco Bell did not hand over its trademarked bell to Forever 21 forever, but for this specific product line. And although they have not released the contract (which is normal), we can safely assume that the well-known fast-food chain negotiated quality control terms that allow it to inspect and approve the products and marketing campaigns surrounding the launch. This helps ensure the partnership ends with them both living happily ever after and not in litigation land.
Taco Bell described itself as “the fast fashion of food” which is why partnering with Forever 21 made perfect sense. In a press release on the partnership, Taco Bell’s VP of Merchandising said, “Food, like fashion, is driven by trends and culture. Merging fashion and food in this collection gives our customers a new way to experience both our brands.”
Taco Bell has had everyone thinking outside the bun of traditional collabs.