Co-Branding Risks

Legal Liability

One of the greatest risks to consider before entering into a co-branding partnership is legal liability and potential damage to your brand. Co-branding is a form of trademark licensing. Accordingly, the potential product defect liability inherent in any trademark licensing arrangement is also a factor in co-branding alliances. Each company involved in co-branding should be aware that affixing their brands to a product could make them co-parties in a product liability lawsuit.

A co-branding alliance includes rights, restrictions and obligations on behalf of both parties that should be clearly defined in a binding co-branding contract. The purpose of this contract is to protect both participating companies, and to clearly define the limitations of the agreement. These restrictions typically include market plan strategy and specifications, branding specifications, licensing, payments and royalties, representations and warranties, exclusivity, liability, term and termination, confidentiality, disclaimers and indemnification (6).

Product Safety Concerns

The safety of CrossFit workouts has been questioned by many, including the Department of Justice, according to Greg Glassman, owner of CrossFit (17). People concerned about conditions resulting from the intensity of CrossFit workouts, such as rhabdomyolysis, may shy away from the brand altogether. Rhabdomyolysis is a condition wherein muscle tissue breaks down to the point that it starts poisoning the kidneys (7).

Glassman vehemently defends his brand and has said that the Workouts of the Day (WOD) “are designed to exceed the capacities of the world’s fittest athletes.” An immense community of fitness enthusiasts have learned the movements, tested the theory and accumulated a huge amount of data supporting Glassman’s equation:

CVFM @ HI + Communal Environment = Health

A regimen of constantly varied (CV), functional movements (FM) performed at high intensity (@HI) in a communal environment leads to health and fitness. (8)

Companies embarking on a co-branding arrangement maintain a responsibility to validate the product safety records of potential partners.