A Concession Agreement is a type of contract between a company and the government that grants the company the right to operate in a particular area within the jurisdiction authorized by the government.

Franchise Agreement

Concept

Concession Agreement in English is Concession Agreement.

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A franchise agreement is a contract between a company and a government that grants the company the right to operate in a particular area, within the limits of the jurisdiction permitted by the government, on the most favorable terms. determined.

Franchise agreements can also be used in agreements between the owner of a non-governmental facility and a franchisee or franchisee, granting the franchisee certain privileges to operate the premises. this facility for a specified period of time and subject to specified conditions.

How the Franchise Agreement Works

Franchise agreements are used in many industries, and contract sizes vary from hundreds of millions of dollars worth of resource franchises to small movie theater food and beverage franchises. districts.

The terms of a franchise agreement depend largely on the attractiveness and nature of the franchise.

For example, a food franchise agreement at a popular sports stadium will not have many favorable terms for the franchisee.

On the other hand, when the government wants to attract resource extraction companies to an impoverished area, it will make recommendations with many incentives to attract these companies, such as reducing taxes and concession rates. lower rights.

In all franchising, the franchisee must pay the franchisor a recurring franchise fee specified in the contract.

The more attractive the franchise and the higher the profit potential, the less likely it is to offer incentives such as government tax breaks.

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Concession agreements between the government and private businesses often involve the right to use public infrastructure, such as railways.

These rights may be granted to individual businesses or monopolies or may be granted to multiple organizations.

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As a party to the contract, the government will set regulations relating to the construction and maintenance of public infrastructure, plus existing performance standards.

Example of franchise agreement

For example, a concession agreement between the French government, the UK government and two private companies, the British Channel Tunnel consortium and French France-Manche SA, to build an underwater tunnel connecting the two countries.

On a smaller scale, essential suppliers in many localities operate under concession agreements with local governments, corporations or land owners.

For example, restaurants, retail stores located in airports, suppliers at fairs organized by local authorities, etc.

The franchise agreement for these types of businesses will define the length of time the franchisee can operate, insurance requirements, and all fees charged by the property owner, among other terms.

Fees payable to the franchisor can be space rent, a percentage of sales on the franchised property, or both.

The determination of which party is responsible for utilities, maintenance, and repairs is also outlined in the agreement.

Concession Agreement and Franchise Agreement

A franchise agreement is a type of contract where the franchisee is granted the right to use the proprietary processes and trademarks of an entity (the franchisor) to sell products or provide services. service in the name of the franchisor.

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In franchising, the franchisor usually has to pay the franchisor an initial fee or a pre-season (annual licensing fee) or both.

Unlike the Franchise Agreement used in the business sector, the Concession agreement is used in public-private partnership models.

This type of franchising has a franchisor, usually a government or a local authority, granting a business the right to use public infrastructure for a pre-determined period of time.

This form is also used in agreements between the owner of a non-government facility and a business, granting the business certain privileges to do business in the facility for a limited period of time. determined time.

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Fees payable to the franchisor can be space rent, a percentage of sales on the franchised property, or both.