Operating Management Agreements are essential legal instruments used when a property owner or business entity wishes to engage a professional operator to manage their facility or business operations. The Operating Management Agreement establishes the framework for this relationship, detailing the operator's authority, responsibilities, and performance expectations while protecting the owner's interests. These agreements are particularly common in Australia's property, hospitality, and facility management sectors, where professional management services are frequently utilized. The document must comply with Australian federal and state legislation, including corporate law, employment regulations, and property laws. It typically includes comprehensive provisions for operational standards, financial arrangements, reporting requirements, risk allocation, and termination procedures, making it suitable for complex operational arrangements where professional management expertise is required.
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1. Parties: Identification of the property owner/principal and the operator/manager
2. Background: Context of the agreement, description of the property/business, and purpose of the management arrangement
3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement
4. Appointment and Term: Formal appointment of the operator, term duration, and renewal provisions
5. Operator's Rights and Obligations: Comprehensive outline of the operator's authority, responsibilities, and duties
6. Owner's Rights and Obligations: Owner's responsibilities, including provision of access, information, and resources
7. Financial Arrangements: Management fees, payment terms, expense arrangements, and financial reporting requirements
8. Operating Standards: Required service levels, quality standards, and performance metrics
9. Reporting and Compliance: Regular reporting requirements, compliance obligations, and audit rights
10. Staff and Employment: Employment arrangements, responsibilities for staff, and HR management
11. Insurance and Liability: Required insurance coverage and allocation of liability between parties
12. Termination: Termination rights, processes, and consequences
13. Handover Provisions: Requirements and processes for transition at agreement end
14. General Provisions: Standard boilerplate clauses including notices, governing law, dispute resolution
1. Intellectual Property: IP ownership and licensing arrangements, used when the operation involves significant IP assets
2. Emergency Procedures: Special protocols for emergency situations, important for high-risk or public facilities
3. Environmental Compliance: Environmental obligations and standards, necessary for operations with environmental impact
4. Capital Expenditure: Processes for major capital improvements, used when operator has capex responsibilities
5. Marketing and Promotion: Marketing responsibilities and budget, relevant for customer-facing operations
6. Force Majeure: Provisions for extraordinary events, particularly important in volatile industries
7. Competition Restrictions: Non-compete and exclusivity provisions, relevant in competitive markets
8. Data Protection: Specific data handling requirements, important when dealing with sensitive information
1. Property Details: Detailed description of the managed property/business assets
2. Services Specification: Detailed scope of services to be provided by the operator
3. Fee Schedule: Detailed breakdown of management fees, incentives, and payment calculations
4. Key Performance Indicators: Specific performance metrics and measurement criteria
5. Operating Budget: Initial or sample operating budget and budget preparation procedures
6. Reporting Templates: Standard formats for required operational and financial reports
7. Employee Information: Details of transferred or key employees and related arrangements
8. Maintenance Schedule: Planned maintenance requirements and schedules
9. Insurance Requirements: Detailed insurance specifications and coverage requirements
10. Operating Procedures: Standard operating procedures and manuals
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