When a manufacturer wishes to have almost full control of its retail outlets, without, however, having to manage them on a day-to-day basis, it can use a lease-management system. Once an outlet is established in accordance with the owner's specifications, the owner entrusts the management of that outlet to site operator for a determined term under a contract that resembles both a lease and management agreement. Under such an agreement, the manufacturer is relieved from having to directly manage the retail outlets, but it retains legal control thereof.

This template provides the legal framework for this type of transaction and has been drafted for the context of a manufacturer that owns the entire business and a premises where the outlet is located.

We recommend using this template to govern and define the relationship between a manufacturer/owner of a retail outlet, which is also the main supplier of the products sold from this outlet, and the lessee-manager, who it wishes to hire to operate the outlet as an independent contractor (individual or conpany).

The lease management agreement is somewhat similar to the single-unit franchise agreement (template K05400) in that the operator has little autonomy, but unlike the lessee-manager the franchisee usually owns the outlet. The lease management agreement is also similar to the dealership agreement (template K04200), as both include an obligation to obtain supplies from the manufacturer. However, unlike a single-unit franchisee or dealer, the lessee-manager does not own the outlet and, therefore, does not have the discretion to change the supplier.

A lease management system is used in the oil industry, where every major producer operates a network of gas stations to sell its petroleum products. Although our template is presented as a single contract, a lease management can also be transacted through a principal agreement covering the leasing and managing of a retail outlet, and accessory contracts such as a supply agreement and an agreement governing the credit granted to the lessee-manager. In this regard, we strongly suggest that you refer to our following templates: General Lease Agreement (E02200), License to Use Trademark Agreement (H02500), Conditional Sales Agreement (L02200) and General Supply Agreement (G02300).

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Accounts Receivable
0.01.02 Additional Rent
0.01.03 Agreement
0.01.04 Banner
0.01.05 Basic Rent
0.01.06 Best Effort
0.01.07 Breach
0.01.08 Change in Control
0.01.09 Confidential Information
0.01.10 Encumber or Encumbrance
0.01.11 Event of Default
0.01.12 Force Majeure
0.01.13 Fundamental Provisions
0.01.14 Goods in Stock
0.01.15 Hazardous Materials
0.01.16 Intellectual Property
0.01.17 Leased Premises
0.01.18 Legal Representatives
0.01.19 Licence
0.01.20 PARTY
0.01.21 Person
0.01.22 Prime Rate
0.01.23 Products
0.01.24 Related Person
0.01.25 Subsidiary
0.01.26 Trade-Mark
0.02 Precedence
0.03 Jurisdiction
0.03.01 Governing Law
0.03.02 Non-compliance
0.04 Miscellaneous
0.04.01 Cumulative Rights
0.04.02 Time and Dates
0.04.03 Financial References
0.04.04 References within Agreement
0.04.05 Gender and Number
0.04.06 Headings
0.04.07 Presumptions
0.04.08 Knowledge
0.04.09 Approval
0.04.10 GAAP
1.00 PURPOSE
1.01 Lease
1.02 Management
1.03 Licence
1.04 Conditions
1.04.01 Required by OWNER
1.04.02 Required by LESSEE-MANAGER
1.04.03 Choice
2.00 CONSIDERATION
2.01 Lease
2.01.01 Rent or Basic Rent
2.01.02 Renewal
2.02 Management
2.02.01 Commisssions
2.03 License and Trade-Marks
3.00 TERMS OF PAYMENT
3.01 Lease
3.01.01 Rent
3.02 Management
3.02.01 Commission
3.03 Licence and Trade-Marks
3.04 Mean of Payment
3.05 Interest
3.06 Loss of Term
4.00 SECURITY
4.01 In favour of OWNER
4.02 In favour of LESSEE-MANAGER
4.03 Suretyship
4.04 Movable Hypothec on the Universality of the Accounts Receivable
4.05 Movable Hypothec on the Universality of Goods in Stock
4.06 Deposit in Trust
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Status
5.02 Authority
5.03 Binding Agreement
5.04 Canadian Resident
5.05 Legal Proceedings
5.06 Commission
5.07 Insurance
5.08 Nominee
5.09 Fundamental Provisions
5.10 Disclosure
6.00 REPRESENTATIONS AND WARRANTIES OF THE OWNER
6.01 Status
6.02 Authority
6.03 Binding Agreement
6.04 Insurance
6.05 Nominee
6.06 Fundamental Provisions
6.07 Disclosure
6.08 Leased Premises
6.08.01 Ownership
6.08.02 Operating Permits
6.08.03 Environment
6.09 Trade-Marks
6.09.01 Ownership
6.09.02 Licence
7.00 REPRESENTATIONS AND WARRANTIES OF THE LESSEE-MANAGER
7.01 Status
7.02 Authority
7.03 Binding Agreement
7.04 Insurance
7.05 Nominee
7.06 Fundamental Provisions
7.07 Disclosure
7.08 Leased Premises
7.08.01 Good Working Order
7.08.02 Rights
7.09 Management
7.09.01 Independent Contractor
7.09.02 Financial Results
7.09.03 Human Resources
7.09.04 Operating Permit
7.10 Fiscal Position
7.10.01 Default
7.10.02 Payment
7.10.03 Deductions
7.11 Solvency
7.12 Hazardous Materials
7.12.01 No Use
7.12.02 Use in Compliance
8.00 MUTUAL DUTIES AND OBLIGATIONS
8.01 Confidential Information
8.01.01 Undertaking
8.01.02 End of Agreement
8.02 Insurance
8.02.01 Insured Risks
8.02.02 Amount of Coverage
8.02.03 Issuer
8.02.04 Co-insured
8.02.05 No Limitation
8.03 Indemnification
8.03.01 “Loss”
8.03.02 Scope
8.03.03 Procedure
8.03.04 Deductible
8.03.05 Limitation on Claims
8.04 Disclosure of Agreement
9.00 DUTIES AND OBLIGATIONS OF THE OWNER
9.01 Leased Premises
9.01.01 Layout and Identification
9.01.02 Good Working Order
9.01.03 Enjoyment
9.01.04 Public Services
9.01.05 Repairs
9.01.06 Assignment and Sub-lease
9.01.07 Taxes, charges etc.
9.02 Management
9.02.01 Pricing Policy
9.02.02 Debts
9.02.03 Marketing
9.02.04 Training
9.02.05 Supply
9.02.06 Transportation
9.03 Credit and Financing
9.03.01 Opening of Credit
9.03.02 Invoicing
9.03.03 Reimbursement
9.03.04 End of Credit
9.04 Trade-Mark
9.05 Interference
9.06 Indemnity
10.00 DUTIES AND OBLIGATIONS OF THE LESSEE-MANAGER
10.01 Leased Premises
10.01.01 Basic Rent
10.01.02 Additional Rent
10.01.03 Good Working Order
10.01.04 Maintenance, Repairs and Notice
10.01.05 Replacement
10.01.06 Environment
10.01.07 Visitation Right
10.01.08 Business Hours
10.02 Taxes and Charges
10.02.01 Taxes
10.02.02 Other Expenses
10.03 Assignment and Sub-lease
10.03.01 Conditions
10.03.02 Responsability
10.03.03 Change in Control
10.04 Management
10.04.01 Operation
10.04.02 Supply and Sale
10.04.03 Inventory
10.04.04 Credit Card
10.04.05 Marketing
10.04.06 Advertising
10.04.07 Denunciation
10.04.08 Permit
10.04.09 Indemnity
10.05 Trade-Mark
10.05.01 Use
10.05.02 Licence Assignment
10.05.03 Duration
10.06 Insurance
10.06.01 Coverage
10.06.02 Property Damages and Civil Liability
10.06.03 Policy
10.06.04 Increase in Risks
10.06.05 Copies of the Policies
10.06.06 Workplace Health
10.07 Resiliation or Termination of the Agreement
10.08 Non-competition
10.08.01 Scope
10.08.02 Penalty
10.08.03 Additional Remedy
10.09 Non-solicitation of Staff
11.00 SPECIAL PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Effect of Breach
11.01.03 Exception
11.02 Force Majeure
11.02.01 No Default
11.02.02 Duty
11.02.03 Rights of Other PARTY
11.03 Relationship
11.03.01 Independent Contractors
11.03.02 No Control over Performance
11.03.03 No Authority to Bind
11.04 Further Assurances
11.05 Other Remedies
11.05.01 Choices
11.05.02 No Limitations
11.06 Prescription
11.07 Intellectual Property
11.08 Warranty
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Dispute Resolution
12.02.01 Good Faith Negotiations
12.02.02 Mediation
12.02.03 Arbitration
12.03 Election
12.04 Counterparts
12.05 Amendment
12.06 Waiver of Rights
12.07 Electronic Transmission
12.08 Language
13.00 TERMINATION
13.01 Mutual Consent
13.02 Unilateral Termination
13.03 Without Notice
13.04 Prior Notice
13.05 Change in Control
14.00 EFFECTIVE DATE
14.01 Retroactivity
14.02 Execution
14.03 Deferral
15.00 DURATION
15.01 Probationary or Trial Period
15.02 Initial Term
15.03 Renewal
15.03.01 First Renewal
15.03.02 Subsequent Renewals
15.04 Survival
15.05 Non Renewal
16.00 SCOPE

SCHEDULE A – EXCERPT FROM A RESOLUTION OF THE OWNER
SCHEDULE B – EXCERPT FROM A RESOLUTION OF THE LESSEE-MANAGER
SCHEDULE 2.02.01 – COMMISSIONS
SCHEDULE 4.03 – SURETYSHIP
SCHEDULE 4.04 – MOVABLE HYPOTHEC ON ACCOUNTS RECEIVABLE
SCHEDULE 4.05 – MOVABLE HYPOTHEC ON GOODS IN STOCK
SCHEDULE 10.01.04 – STANDARDS OF USE