How to start a retail business by licensing - By: Danny Austin

Before you try to make the leap to multiunit retail, ask yourself these basic questions: Does your product fit a demand just waiting to be tapped? Have you already found a multiunit retailer that's a good fit for your product? What is it about your product that would make a buyer see fit to take a chance on your product? If you land the deal, can your production handle the volume? Do you want to sell your product directly to the retailer, or do you want to license your product to a manufacturer who'll then distribute it for you?

Kevin Hester took the licensing approach with his Cajun Chickcan, a wire caddy he designed to solve the problem of beer can chicken recipes run amuck by the cooking bird's toppling tendencies.

After patenting his idea and marketing the caddies to local, independent hardware retailers, Hester asked himself all the right questions and discovered his product was ready for prime time. It didn't hurt that a popular cookbook on making beer can chicken and a barbecue guru extolling the beer-tender fowl's virtues were fueling demand for his product among American barbecue chefs in love with the idea of poultry impaled on a can of suds.

Hester's next step? Knowing that he needed some help getting exposure for the Chickcan, he went in search of a licensee. Walking the aisles of Home Depot and Lowes led him to Rodney Barber, owner of Bayou Classic in Brandon, Mississippi, who agreed to license the product, manufacture it and get it on the shelves.

"Barber invented the turkey fryer, and he saw what a good product could take off and do ... He helped me launch into the big box stores, which I would not have been able to do [on my own]," Hester said. Now the Chickcan is on the aisles in Wal-Marts throughout the country, and Hester earns royalties from an estimated $4 million in sales per year.

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