Restaurant Management Agreement for Philippines

Restaurant Management Agreement Template for Philippines

A comprehensive legal agreement governed by Philippine law that establishes the terms and conditions under which a professional management company will operate and manage a restaurant business on behalf of the owner. The document details operational responsibilities, financial arrangements, compliance requirements with local food safety and business regulations, staffing obligations, performance standards, and the distribution of revenues and profits. It incorporates specific provisions to ensure compliance with Philippine business, labor, and food service regulations while protecting both parties' interests in the management relationship.

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What is a Restaurant Management Agreement?

The Restaurant Management Agreement is essential for restaurant owners in the Philippines who wish to delegate the operation of their establishment to professional management companies while retaining ownership. This document is particularly relevant when owners lack operational expertise or wish to benefit from professional management systems and expertise. The agreement, governed by Philippine law, must comply with various regulations including the Food Safety Act of 2013, Consumer Act, and local government requirements. It typically includes detailed provisions for operational standards, financial management, staff employment, regulatory compliance, and profit-sharing arrangements. The document is crucial for protecting both parties' interests while ensuring clear accountability and performance standards in the management relationship. It's particularly important in the Philippine context where local business practices, labor laws, and food safety regulations create a unique operating environment requiring specific consideration in the management arrangement.

What sections should be included in a Restaurant Management Agreement?

1. Parties: Identification of the restaurant owner and management company, including complete legal names and addresses

2. Background: Context of the agreement, including property details, business objectives, and purpose of the management arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Appointment and Term: Scope of manager's appointment, duration of the agreement, and renewal terms

5. Manager's Rights and Responsibilities: Comprehensive outline of the management company's authority, duties, and operational responsibilities

6. Owner's Rights and Obligations: Owner's retained rights, obligations, and areas requiring owner's approval

7. Staff and Employment: Employment arrangements, staffing responsibilities, and compliance with Philippine labor laws

8. Operating Standards: Required quality standards, brand requirements, and compliance with Philippine food service regulations

9. Financial Management: Banking arrangements, accounting practices, financial reporting, and audit rights

10. Fees and Payments: Management fees, performance fees, payment terms, and expense allocations

11. Insurance and Liability: Required insurance coverage, indemnification provisions, and liability allocation

12. Termination: Termination rights, notice periods, and post-termination obligations

13. Handover Provisions: Procedures for transition upon termination or expiry

14. Governing Law and Dispute Resolution: Application of Philippine law and dispute resolution mechanisms

15. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Restaurant Management Agreement?

1. Intellectual Property Rights: Required when the restaurant operates under a specific brand or trademark, or when proprietary systems are involved

2. Non-Competition: Include when restricting the manager from operating competing restaurants in the vicinity

3. Emergency Services: Specific provisions for crisis management and emergency responses, particularly relevant for high-risk locations

4. Environmental Compliance: Detailed environmental obligations when the property has specific environmental concerns or requirements

5. Technical Services: When the manager provides additional technical or consulting services beyond standard management

6. Marketing and Promotion: Detailed marketing obligations and budget when specific promotional activities are required

7. Force Majeure: Detailed provisions for handling unforeseen circumstances, particularly relevant post-COVID

8. Development and Renovation: Include when the manager has responsibilities for property improvements or renovations

What schedules should be included in a Restaurant Management Agreement?

1. Property Details: Detailed description of the restaurant premises, including floor plans and facilities

2. Operating Budget: Initial operating budget and format for future budgets

3. Performance Standards: Specific KPIs and performance metrics for evaluating management success

4. Fee Structure: Detailed breakdown of management fees, incentive fees, and calculation methods

5. Required Insurance: Specific insurance types and coverage amounts required

6. Staff Positions: Key personnel positions and their qualifications

7. Operating Supplies and Equipment: Inventory of equipment and supplies provided by owner

8. Brand Standards: Specific operational and quality standards to be maintained

9. Reporting Templates: Standard formats for financial and operational reports

10. Local Permits and Licenses: List of required regulatory permits and responsible parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Food & Beverage

Hospitality

Real Estate

Business Services

Restaurant Management

Facilities Management

Retail

Leisure & Entertainment

Property Management

Consulting Services

Relevant Teams

Legal

Operations

Finance

Compliance

Human Resources

Property Management

Business Development

Risk Management

Facilities Management

Food & Beverage

Contract Management

Relevant Roles

Restaurant Owner

Operations Director

General Manager

Chief Executive Officer

Chief Operating Officer

Legal Counsel

Compliance Officer

Finance Director

Property Manager

Business Development Manager

Restaurant Manager

Food and Beverage Director

Contract Manager

Risk Manager

Human Resources Director

Facilities Manager

Industries
Civil Code of the Philippines (Republic Act No. 386): Governs general contract formation, obligations, and contractual relationships between parties. This is fundamental for the management agreement's basic structure and enforcement.
Food Safety Act of 2013 (Republic Act No. 10611): Establishes the food safety regulatory framework in the Philippines, including requirements for food business operations and safety standards.
Consumer Act of the Philippines (Republic Act No. 7394): Protects consumer rights and establishes standards for business practices, particularly relevant for food service establishments.
Labor Code of the Philippines (Presidential Decree No. 442): Regulates employment relationships, including worker rights, benefits, and occupational safety standards in restaurant operations.
Sanitation Code of the Philippines (Presidential Decree No. 856): Sets standards for sanitation and hygiene in food establishments, including requirements for food handling and preparation.
Local Government Code (Republic Act No. 7160): Governs local business permits, licenses, and specific regulations that vary by municipality or city for restaurant operations.
Value Added Tax Law (Republic Act No. 8424): Regulates tax obligations for restaurant businesses, including VAT registration and compliance requirements.
Corporation Code of the Philippines (Republic Act No. 11232): Governs corporate structures and operations if the restaurant is operated as a corporation, including management arrangements.
Environmental Laws (Various Acts): Includes regulations on waste management, pollution control, and environmental compliance for food service establishments.
Fire Code of the Philippines (Republic Act No. 9514): Sets safety standards and requirements for fire prevention and protection in commercial establishments like restaurants.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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