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A management contract is an arrangement under which operational control of an enterprise is vested by contract in a separate enterprise that performs the necessary managerial functions in return for a fee. Management contracts involve not just selling a method of doing things (as with franchising or licensing) but involve actually doing them. A management contract can involve a wide range of functions, such as technical operation and of a production facility, management of personnel, accounting, marketing services and training. In Asia, many hotels operate under management contract arrangements, as they can more easily obtain economies of scale, a global reservation systems, brand recognition etc. It is not unusual for contracts to be signed for 30 years, and having a fee as high as 3.5% of total revenues and 6-10% of gross operating profit. Management contracts have been used to a wide extent in the airline industry, and when foreign government action restricts other entry methods. Management contracts are often formed where there is a lack of local skills to run a project. It is an alternative to foreign direct investment as it does not involve as high risk and can yield higher returns for the company. The first recorded management contract was initiated by Qantas and Duncan Upton in 1978.〔http://www.iaccm.com〕 ==Difference between management contract and franchising == In business management, franchising is a contractual relationship between franchiser (owner of the company) and franchisee (buyer of a brand name). The franchiser allows the franchisee to use its trademark along with certain business systems and processes in exchange for a fee. Business students usually get confused between the concepts of management contracts and franchising. Although they have much in common, such as they both earn by selling intangibles and are both affiliated with another company, but where a management contract acts as a framework and provides formation and structure to the company and its members, franchisee remains an independent businessman. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Management contract」の詳細全文を読む スポンサード リンク
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