Retail Pooling Agreement

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Introduction

In the field of retail, it is becoming increasingly difficult for independent merchants to remain competitive. The procurement and operating costs of these businesses are such that they cannot compete with the prices offered by merchants with large surfaces or who operate multiple sales points without taking unsustainable risks.

In order to be on equal terms with the larger actors on their market, some independent merchants try to establish groups of independent merchants to increase their purchasing power with their main suppliers. The establishment of such groups is usually results in the creation of a common banner allowing the independent merchants to project a strong image to their customers. The more merchants join the group, the easier it is for the group to grow. The legal framework of the inclusion of an independent merchant to the group usually takes the form of a retail pooling agreement.

This document establishes the main components of the legal and financial framework of the retail pooling agreement.

Description

The Retail Pooling Agreement is the legal instrument by which an independent merchant, named the MERCHANT, joins a group of other merchants, named the WHOLESALER, to add its purchasing power to the WHOLESALER’s and, consequently, benefit from economies of scales and other benefits allowed by such group.

Use

Unlike dealership agreement, franchise agreement and lease management agreement, by which the manufacturers establish their network of outlets, the retail pooling agreement works in the opposite direction in that it is the merchants who band together to offer their outlets as opportunities for the manufacturers’ products.

Although it is presented, in this agreement, as a single instrument, the retail pooling agreement may also be designed as a contractual framework consisting of a principal agreement relating to membership and numerous other ancillary agreements relating to specific topics, such as the management of credit granted to a new member. In this regard, we strongly suggest you refer to the License to Use Trademark (document H02.500 of the Business Precedents), the Conditional Sale Agreement (document L02.200 of the Business Precedent), the General Lease Agreement (document E02.200 of the Business Precedents), the General Supply Agreement (document G02.300 of the Business Precedents), and the Movable Hypothec on the Universality of Goods in Inventory (document D06.200 of the Business Precedents). In addition, to better understand the credit process, we suggest reading the document titled "The legal regime of credit to customers (document L00.005 of the Business Precedents).

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