IP STRATEGY

Trademark Valuation as a Financial Asset

MAY 2026 · 7 min read

The Coca-Cola brand is valued at $80 billion — more than all its factories and employees combined. How does that happen on the books, and why does it matter to you as a Saudi mid-size or emerging brand owner? Trademark valuation is not academic luxury — it defines your value on exit or investment.

When Does Valuation Matter?

When selling the company in whole or in part — valuation defines the price.

During a funding round — investors demand a number for intangibles.

When licensing the mark to another party (franchise, licensing) — defines royalty.

In a litigation damages claim — supports the damages argument.

For tax and accounting purposes — disclosure on financial statements.

The Three Main Methodologies

Cost Approach: how much did building the brand actually cost you (ads, design, marketing, legal fees)? Simple but ignores future value.

Market Approach: what have similar companies paid for similar brands? Requires available market data, rare in Saudi Arabia.

Income Approach: what value is specifically attributable to future revenues because of the brand? Most accurate but most complex. Uses the "Relief from Royalty" model.

The "Relief from Royalty" Method in Detail

The idea: if you did not own the brand, how much would you pay in licensing royalties over future years? That "relief" is the brand value.

Requires: revenue forecast for 5–10 years, an industry-accepted royalty rate (typically 2–7%), and a discount factor reflecting continuity risk.

Factors That Increase Value

Continuity and age: a 10-year mark is stronger than a one-year one.

Market share: a brand occupying 30% of its market beats one at 5%.

Geographic reach: a brand registered in 15 countries is stronger than a local-only one.

Brand awareness: measured by consumer surveys.

Emotional loyalty: customers' willingness to pick your brand even when a competitor is cheaper.

A Worked Example

A Saudi food company, annual revenue SAR 50 million, growing 12% annually. The appraiser used income approach with 4% royalty and 10% discount.

Estimated brand value: about SAR 14 million. The whole company was valued at SAR 65 million — so the brand makes up 22% of total company value.

Who Performs the Valuation?

A certified appraiser from the Ministry of Justice Experts Center or the Saudi Organization for Certified Public Accountants. Fees: SAR 25,000–80,000 depending on company size.

In major cases or international deals, international valuation houses are sometimes used (Brand Finance, Interbrand).

Why This Investment Is Worth It

A company that knows its brand value negotiates from strength. One that does not, accepts the first offer. The difference between SAR 14M and SAR 7M on exit is usually the decision of "did we run a formal valuation in advance."

At Rights we work with certified appraisers to provide standards-compliant reports usable for negotiation, litigation, and accounting disclosure.