Lease Management Agreement
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Download our Lease Management Agreement template in Word format. This document is located in the Distribution & Sales chapter of Edilex's catalogue of Contract Templates.
Introduction
When a manufacturer wishes to have almost absolute control of its sales points, without having to manage them on a day-to-day basis, it can use a lease-management formula. This formula allows the manufacturer to establish points of sales which comply with the design it wants, and to retain full ownership of such outlets. Once the outlets are established, their management are entrusted to site operators on an hybrid lease and management basis. This procedure relieves the manufacturer from having to manage physical retail outlets while retaining legal control on such.
This document is a framework to govern such transactions. This document has been drafted based on the assumption that the manufacturer is the owner of the entire business and of the premises in which the outlet is located.
Description
The Lease Management Agreement is the legal instrument which evidences the transaction by which a person operating a retail outlet, called OWNER, entrusts that outlet to a second person, called the LESSEE-MANAGER, on the basis of an hybrid between a lease and a management agreement, so that it operates it to his benefit and at his own risk, for a fixed term, subject however to the principal obligation to purchase and sell, on an exclusive basis, the products of the MANUFACTURER / OWNER.
Use
We recommend the use of this framework document to govern and define the relationship between a manufacturer / owner of a retail outlet, who is also the main supplier of the products offered for sale within this point of sale, and the LESSEE-MANAGER which it wishes to hire to operate the point of sale as a freelancer or independent contractor.
The lease management agreement is somewhat similar to the unit franchise agreement (see document K05.400 of the Business Precedents) in that the operator has little autonomy, but differs from it because the franchisee is the owner of his point of sale, which is not the case for the lessee-manager. The lease management agreement is also similar to the dealership agreement (see document K04.200 of the Business Precedents) as both include an obligation to obtain supplies from a specific manufacturer, but it differs from it in that, as in the unit franchise agreement, the dealer remains the owner of the outlet with the added benefit that the dealership is free to change suppliers.
The classic case of lease management agreements is the oil industry, in which every major producer operates a network of gas stations to sell its products. Although this agreement is structured as a single instrument, the lease management agreement can also be designed as a contractual framework containing, as a principal agreement, a lease for the retail outlet, and ancillary contracts such as a supply contract and a contract governing the grant of credit to the lessee-manager. In this regard, we strongly suggest you refer to the General Lease Agreement (document E02.200 of the Business Precedents), the License to Use Trademark Agreement (document H02.500 of the Business Precedents), the Conditional Sales Agreement (document L02.200 of the Business Precedents) and the General Supply Agreement (document G02.300 of the Business Precedents).
