Owners and operators must consider a wide variety of legal and business issues as they navigate and mitigate the risks associated with this black swan event. Management agreements, franchise agreements, loan agreements, collective bargaining agreements, and insurance policies are just some of the considerations.
The illusory performance test
In the negotiation of management agreements, owners take comfort from the performance test that in the most optimistic light will allow the hotel owner to terminate a management company that does not meet the standards of the performance test.ÊBut letÕs look more deeply into the proposition that the performance protects the owner from the under-achieving management company.
Top ten things to consider when negotiating a hotel management agreement
When both owners and operators reach the end of a hotel management agreement negotiation there are always things that potentially could have been done differently – here are the issues to consider going in.
