As businesses grow and expand, it’s common for them to enter into partnerships or agreements with other companies to drive revenue and achieve mutual goals. One type of partnership commonly seen in the business world is a concession agreement, which allows one business to operate within another business’s premises or sell their products in another business’s store.
A concession agreement, also known as a license or lease agreement, is a legally binding contract between two parties where the licensor (the owner of the premises) grants the licensee (the operator) the right to use their business premises to sell their goods or provide services. Concession agreements are common in shopping malls, amusement parks, airports, and other public areas where multiple businesses operate.
When entering into a concession agreement, one of the most important questions to consider is who owns the concession agreement? Typically, the licensor (owner of the premises) owns the agreement, while the licensee (operator) owns the business and everything necessary to run it.
However, there may be circumstances where the licensee owns the concession agreement. This situation can happen when the licensee invests in the premises, such as building a kiosk or renovating a storefront to meet the licensor’s requirements. In this case, ownership of the agreement may transfer to the licensee.
To avoid any confusion, it’s essential to outline clear ownership terms in the concession agreement. The agreement should specify who owns the agreement, the premises, and any equipment or inventory necessary to operate the business. These terms protect both parties from potential disputes or disagreements down the road.
Another crucial element to consider in concession agreements is the duration. Typically, these agreements have a fixed term, so it is essential to specify a start and end date in the agreement. Once the agreement expires, the licensor may opt to renew, renegotiate or terminate the agreement altogether.
In summary, concession agreements are a common type of partnership in the business world that allow two businesses to work together to achieve mutual goals. Clear ownership terms and a defined duration are essential elements of a successful concession agreement. By outlining these terms upfront, both parties can work together to create a lucrative and prosperous partnership.