Ask HN: Selling/licensing a white labelled iPhone app

I have a paid iPhone app which is making me reliable income. There is now an opportunity to sell it as a white label product to someone who will make it available free, with some features removed, and possibly a few additional features. This is primarily a marketing maneuver for the buyer, who will provide the app to its users using their service, which is tied to my app's niche.

Does anyone have experience doing this, or thoughts to share?

I can think of a few points of consideration:

1. Potential loss of income due to it being available free from someone else. The buyer has a bigger presence and can tap into a bigger market.

2. Build vs. buy and alternatives. The buyer may potentially build their own. My app has been in production for 2 years, with battle-tested code. There are possible, existing alternatives to mine, but I do not know if they are probable (i.e. in terms of willingness, interest, price, etc).

3. Legalities. We aren't lawyers, but what are key things to be aware of. Eg. I will be continuing to sell my app. What's stopping them from re-selling it. I prefer a simple license rather than 1 which no one can understand.

4. Time and effort. Other than the obvious time needed for changes to the app's features, what else is required? Eg. what's a reasonable time period for handholding, providing support

5. Ongoing support. What's the practicality of providing an ongoing source update, or should it be a one time transfer of the code snapshot.

6. What are guidelines to figuring out the magic number?