What is a RoyaltyRange Benchmarking Study?
Our Benchmarking Study is a detailed comparison of publicly available royalty rates, service fees and interest rates that helps to determine an arm’s length (market) range for specific products or services. Our Benchmarking Study is beneficial to the identification of external transactions for the assessment of the arm’s length range. The data provided is useful for setting reasonable rates and fees, and preparing transfer pricing documentation, Patent Box applications, negotiating license agreements, valuing intellectual property, consulting and more.
How does it work?
Once you have placed your request, we will carry out the following steps within our database, in line with your chosen search strategy:
- Quantitative screening: We will perform an initial search to prepare a list of potentially comparable reports.
- Qualitative screening: We will manually review the sample and select a final set of reports.
- Financial analysis: We will calculate the range of rates or fees for third-party agreements, including interquartile and median arm’s length rates.
All our agreements are manually analysed and the final set consists only of agreements with the most comparable terms. We use these agreements to conduct a Comparable Uncontrolled Price (CUP) analysis to calculate a rate or fee range that complies with the arm’s length principle (any rate or fee within this range is deemed to be at the market rate).
What is included in the Benchmarking Study?
Your RoyaltyRange Benchmarking Study will contain:
- A write-up of the entire search process, including the applied search strategy, a description of the taken quantitative and qualitative screening steps, the final list of comparable agreements, and a calculation of a market rate or fee range based on the comparable agreements.
- An appendix with a list of primary rate or fee reports that were selected during the quantitative screening, including elimination reasons for the rejected agreements.
- An appendix with a list of rate or fee reports that were selected during the qualitative screening, including elimination reasons for the rejected agreements.
- Original sources (in PDF format) for the final set of comparable agreements.
Our Benchmarking Study report is prepared within 5 working days and provides a variety of additional information on practices within your industry – such as the basis of rate calculations; prepayment terms; terms of exclusivity; distribution of performed functions, risks assumed and assets used by the parties in the transaction; rights to enhancements, revisions and updates; and extent and duration of legal protection.
There are many benefits to investing in RoyaltyRange’s benchmarking study service. These include:
- Up-to-date data: Our proprietary databases are constantly updated with new transactions and consist of agreements that are typically concluded between unrelated parties. This ensures that the data in our databases reflects recent market practices.
- Ease of use: Our professionals have performed the study for you – meaning you will not have to go through hundreds of agreements in order to find what is relevant for you.
- Speed of service: We finalise the whole process within several working days or before your set deadline.
Fees and ways to pay
As we use our proprietary databases to perform your searches, we can offer a very competitive price for our benchmarking study service. The standard fee starts from €1,500$1,800 (plus VAT) per benchmarking study. This cost covers the preparation of the deliverables and post-search assistance.
We can assist with the creation of the optimal search strategy. If you are interested, or have any questions about our benchmarking study, please contact us at RoyaltyRange today.
RoyaltyRange supplies royalty rates, loan interest rates and service fees data to industry-leading multinational enterprises, global consulting companies, international law firms, government authorities and universities in more than 60 countries. We have locations in the US, UK and Belgium. RoyaltyRange is funded by the European Union’s Structural Funds, with a total share capital of USD 1,000,000.
The RoyaltyRange database has been featured in publications by the Organisation for Economic Co-operation and Development (OECD), World Bank Group (WBG), International Monetary Fund (IMF) and United Nations (UN).
Where can you use our data?
You can use our royalty data reports for tax, transfer pricing, valuation, legal, patent box and benchmarking purposes. We have already analyzed the agreements for you and you can finalize your intellectual property analysis in a matter of hours.