The Operating Management Agreement is a crucial document in the UAE business landscape, used when an owner wishes to delegate the operation and management of their business, property, or facility to a professional management company while retaining ownership. This arrangement is particularly common in the UAE's dynamic market, where specialized expertise and professional management are highly valued. The agreement must comply with UAE Federal Laws, including the Civil Code, Commercial Transactions Law, and relevant sector-specific regulations. It typically includes detailed provisions for operational control, performance standards, financial arrangements, staff management, and reporting requirements, while considering local business practices and cultural norms. The document is especially relevant in sectors such as hospitality, real estate, and facility management, where professional operators bring expertise and established systems to maximize asset performance.
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1. Parties: Identification of the Owner and the Operator/Manager, including full legal names, addresses, and registration details
2. Background: Context of the agreement, description of the business/property being managed, and general purpose of the arrangement
3. Definitions: Detailed definitions of key terms used throughout the agreement
4. Appointment and Scope: Formal appointment of the operator and detailed scope of management services
5. Term and Renewal: Duration of the agreement, commencement date, and renewal provisions
6. Operator's Rights and Obligations: Comprehensive list of the operator's responsibilities, authority limits, and duties
7. Owner's Rights and Obligations: Owner's responsibilities, including provision of resources and information
8. Financial Terms: Management fees, payment terms, expenses, and financial reporting requirements
9. Operating Standards: Required performance standards, quality metrics, and compliance requirements
10. Staff and Employment: Provisions regarding employment, staffing requirements, and HR responsibilities
11. Reporting and Records: Requirements for operational and financial reporting, record-keeping obligations
12. Intellectual Property: Protection and usage rights of trademarks, systems, and other IP
13. Confidentiality: Obligations regarding confidential information and trade secrets
14. Liability and Indemnification: Allocation of risks, liability limitations, and indemnification provisions
15. Insurance: Required insurance coverage and related obligations
16. Termination: Grounds for termination, notice requirements, and consequences
17. Post-Termination: Obligations and procedures following termination
18. Governing Law and Dispute Resolution: Choice of UAE law and dispute resolution mechanisms
19. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment
1. Non-Compete: Restrictions on operator's competing activities - include when operator has access to sensitive market information
2. Force Majeure: Provisions for unforeseen circumstances - particularly relevant in volatile markets or sectors
3. Emergency Powers: Special authority in emergency situations - important for critical facilities or operations
4. Environmental Compliance: Environmental obligations - necessary for industries with environmental impact
5. Security Requirements: Special security measures - relevant for sensitive operations or facilities
6. Marketing and Branding: Brand standards and marketing requirements - important for customer-facing operations
7. Technology Systems: IT systems and technology requirements - relevant for technology-dependent operations
8. Cultural Considerations: Specific UAE cultural and religious observance requirements - important for certain sectors
1. Services Schedule: Detailed description of management services to be provided
2. Fee Schedule: Detailed breakdown of fees, calculations, and payment terms
3. Performance Metrics: Specific KPIs and performance standards
4. Property/Asset Schedule: Detailed list of properties/assets under management
5. Required Insurance: Specific insurance requirements and minimum coverage
6. Operating Procedures: Detailed operational procedures and standards
7. Initial Budget: First-year operating budget and financial projections
8. Staff Organization: Organization chart and key personnel requirements
9. Required Reports: Templates and specifications for required reports
10. Brand Standards: Applicable brand and quality standards to be maintained
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