What does brand licensing involve?

Brand licensing involves the process where a brand owner (the licensor) permits another party (the licensee) to use its brand identity, trademarks, and associated intellectual property for a specified period, often in exchange for a fee or royalty. This arrangement allows the licensee to produce and sell products bearing the brand's name and logo, leveraging the established recognition and reputation of the brand. This practice helps brands extend their reach into new markets and product categories without incurring the costs associated with new product development or manufacturing.

The other options do not accurately represent the nature of brand licensing. Leasing factory space pertains to real estate and manufacturing operations, which is unrelated to brand identity. Selling trademark rights permanently implies a complete transfer of ownership, which contradicts the temporary nature of licensing agreements. Creating a new brand name from scratch signifies the development of an entirely new brand rather than utilizing an existing one, which is not the essence of licensing.