Management contract

Requirement
• Company with low level of technology and
managerial expertise may seek some
assistance from foreign company.
• In this case foreign company may provide
technical assistance and managerial expertise
in return of monetary compensation this
agreement between two company called
management contract
• Compensation in form of

• 1 A flat fee
• 2 percentage over sales
• 3 performance bonus based on sales growth,
production
 Advantage
• Without risk additional income
• No investment
• Hilton hotel provide these services to others
• Provide a chance to enter in other business in
host country
 Disadvantage

• Spoil the brand if not perform well

• May leak the privacy