Management Agreement Template

Business-in-a-Box's Management Agreement Template

Understanding a Management Agreement

Whether you are a freelance manager or a management consulting firm or agency, you must be aware of the importance of getting things down in writing.

If you are looking for a management agreement that contains all of the necessary components to meet your needs, you’re in the right place. Our management agreement templates contain all of the things you need and cover all bases, so all you have to do is personalize the template by filling in your details.

Here is what you can expect in the management agreement template as well as a breakdown of how to use it.

What is a Management Agreement?

A Management Agreement is a legally binding document between two parties. The purpose of the agreement is to outline all of the crucial aspects of the required managerial functions.

This agreement will also outline the scope of the managerial duties. This in turn includes many factors, such as how long the duties are expected to take to be completed, how much the manager is going to be paid upon completion of the duties, and other details about any changes to the agreement, or if the agreement ends up being cancelled.

All of these key details are laid out in the management agreement, ideally before the role of the manager starts, so that both parties are clear about what is to be delivered and when.

There are many different types of management agreements you can choose from, so select the one that is most applicable to your business. Some examples of the different types of agreements you can access with Business-in-a-Box include a property management agreement, management services agreement, management and administrative services agreement, branch management agreement (to establish & manage), vendor management policy, IT systems & HR management services agreement, to name a few.

Uses of a Management Agreement

Usually, the management company drafts a management services arrangement. It may contain clauses similar to all business arrangements, such as the parties' identities, the start date and length of the agreement, preference of law, arbitration of conflicts, recourse for violation of the agreement, obligation for legal costs, prohibition on oral amendment of the agreement, and so on.

It can also include provisions regarding a variety of other topics, such as the products or services to be delivered, the payment the manager will receive for the services, the method of payment, where the services will be provided (for instance, at the company's headquarters or the management company's offices), and the conditions in which each party will terminate the agreement. In terms of confidentiality, the management firm will frequently need access to details regarding the company that you do not want revealed to competitors or the general public. This will necessitate the inclusion of a confidentiality and nondisclosure clause of the document.

Best Practices for a Management Agreement

The management agreement is intended to secure the interests of the parties over the duration of the contract and determine the objectives before entering the management agreement. It should provide any agreed-upon terminology, but it should at the very least include an overview of the manager's duties, priorities, milestones, and any particular end-products that are required. Here is a list of best practices to follow for a management agreement.

  • Always make clear the agreement's terms of service before putting them on paper.
  • Allow each group time to study the agreement. This decreases the possibility, or at least the viability, of a claim that a party did not comprehend any terms or how they might impact the entire agreement.
  • All parties can closely evaluate the finished agreement and ensure that all applicable agreement factors are included. It is preferable to be overly inclusive rather than missing an important issue. -
  • If such expectations or conditions are not explicitly specified in the contract, do not presume that they have been agreed to.-
  • A formal arrangement is just the first phase in determining the manager’s position as an independent contractor. Once registered, all parties shall strictly adhere to the conditions in order for the status to be upheld.-
  • Make two copies of the document, once for yourself and once for the other entity. Keep a copy of the signed contract for your documentation. You and the other party can review its terms at the end of the duration and decide whether to renew it.
  • You may want to have the agreement witnessed or authenticated, depending on the complexity of the terms. Later objections to the legitimacy of a party's signature would be limited as a result.
The Management Template Explained in Simple Terms
Engagement

The Company hires the Manager to have experience in the running of the Business as well as other management services as the Company may need periodically. These services shall be delivered by the Manager and by other such representatives and supervisors the Manager can appoint.

Terms and Renewal

In this part of the Management Agreement, the terms of the agreement are laid out for both parties to read and observe, so that no disputes will arise at a later date. The agreed terms of the Management Agreement will be in effect for a specified number of months from the date of the Company's opening for business, unless the agreement is discontinued or later continued in compliance with the terms and conditions of the present Management

Agreement

When the current agreed terms of the agreement come to an end, the two parties can then choose to discuss terms for renewal of the agreement as well. The two parties can choose to make changes to their previously agreed terms, or if the terms are deemed to be adequate for both parties, the Management Agreement can simply be renewed for another specified length of time on the current terms.

Fees and Payments

During the length of this Management Agreement, the Company has to pay to the Manager a fee for its management services equivalent to a percentage of the Business's Gross Sales. This is also known as the Management Fee. The Management Fee must therefore be payable monthly in arrears. The Manager shall be compensated for all legitimate and necessary travel and other related costs in accordance with its duties under this agreement. The Manager shall provide the Company with statements and coupons on any costs on which compensation is sought.

The Manager's Authority, Power, Obligations, and Responsibilities

During the length of the current Management Agreement, the Manager shall have absolute control and jurisdiction to administer the Business on behalf of the Company.

The Manager's jurisdiction, rights, roles, and obligations to the Company under this Agreement are quite comprehensive. Here is a detailed breakdown of all of the different things a manager can be involved in.

  • The acquisition, salaries and benefits, and termination of all Company employees employed in the Business.
  • Entering into the normal contracts available for carrying on the Company's business in the normal course of business, including, without restriction, the authority to order merchandise, tools, services, and items needed for the Company's business.
  • The Company's advertising, publicity, and advertisement in accordance with the Franchise Agreement signed between the Company and the Franchisor.
  • Entering into any agreement on the Company's behalf for the repair, operation, or expansion of the Business in accordance with the Franchise Agreement between the Company and the Franchisor.
  • Preparing or having prepared all financial and other documents and reporting needed to be prepared and remitted to the Franchisor according to the Franchisor/Company Franchise Agreement.
Default and Termination

The management agreement also highlights some instances and clauses where the agreement is said to have been terminated. These conditions are important as they can protect both parties from significant legal ramifications and limit their liability in certain instances. If the conditions laid out in the agreement are breached, the agreement can be considered null and void. The existence of any of the following occurrences shall be considered to be a breach of Management Agreements by a Company.

  • If a Company becomes insolvent or bankrupt, or goes into liquidation, either willingly or by order of a Court of qualified authority or makes a general assignment for the good of its creditors, or otherwise admits its insolvency.
  • If a liquidator or liquidators, administrator or administrators, or trustee or trustees in bankruptcy are assigned to the Company, or if the Company's secured creditors seize ownership of the Company's land, or any significant or necessary portion of it, in the absolute discretion of the Manager.
  • Whether the Company refuses to do business at the Business Premises for some reason, or loses the right to ownership of the said premises for any purpose, or otherwise forfeits the right to do or conduct business in the jurisdiction in which the Corporation is situated.
  • If the Company loses, declines, or neglects to pay any monies owed to the Manager as they are due under this Management Agreement on time.
The Parties Relationship and Indemnification

The purpose of this section within the Management Agreement is to ensure the Parties understand, accept, and recognize that this Agreement does not establish any fiduciary relationship between them, and that nothing in this Management Agreement is intended to make either party a partner or joint venturer of the other, or to build any commercial or other arrangement between the Parties.

The Company agrees to keep the Manager free against any responsibility arising from any arrangement entered into with a third party within the limits of the Manager's jurisdiction and powers under this agreement, and to compensate the Manager for any expenses incurred in conjunction with those contracts.

The Company therefore agrees to indemnify and leave free the Manager against every application for any relief whatsoever brought by any party arising out of any behavior or negligence of the Manager or any person operating within its control, whether or not the claim is well-founded.

Why Use a Management Agreement Template by Business-in-a-Box? For your convenience, all the 2,000+ business and legal templates available at Business-in-a-Box have been created by industry experts with the assistance of business lawyers. Your company needs the right documents and agreements to function optimally, and you will find them in Business-in-a-Box.

Sign up with Business-in-a-Box to get your management agreement template and ensure you get your work done how you want. You can draft an all-inclusive legal contract for your business using the arrangement template's wide range of provisions and terminology.

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