The management contract is intended to perform the basic functions of a company smoothly, as the core function is not part of the main activity. Recruiting an external contractor makes it difficult for the company to anticipate the number of conflicts that may arise. For example, the businessman hires a contract management company to run the business. The management company can also take over the management of the supplier. This can result in several trade-offs on rebates, price negotiations and the operation of suppliers. There may be other conflicts, even the same management company is at the same time dealing with the management of several competitors. [5] In this manual, we explain the purpose of these agreements and the functions they involve. You can read a little about the different types of management contracts that are used, as well as download a template that should be used as part of your contract. We will also explore the potential pros and cons of signing a management contract. The hotel management contract is a written agreement between the owner and the hotel operator.

The basis of this relationship is that the operator performs the day-to-day work of the hotel and assumes all the additional tasks such as maintenance, reception, housekeeping, food and beverage management and sales. The management contract company has the power to recruit and lay off employees. The owner will authorize and pay for the hotel`s capital project, but the responsibility rests with the operator. Hotel management contracts can be long and complicated. The negotiation of this agreement focuses on the power of the owner and on the rights of the operator. The initial project is presented by the potential operator. It is usually in favor of the operator, so the trader can look for a long-term contract. It does not want an interference from the owner, but at the same time a continuous supply for the development and growth of the project. [9] Management contracts are also very popular in the public sector. Of particular interest is the food management contract used in care homes, public offices and school sports facilities where food services and facilities are provided by a management company.