An agency agreement exists where a business appoints an agent (usually in a pre determined territory) to win new business and increase its goodwill. A business may target an individual or a company in a specific area where they have an excellent understanding of the market in order to generate sales for and raise the profile of the business. The Commercial Agents (Council Directive) Regulations 1993 is the leading piece of legislation governing commercial agency relationships and amongst other things deals with compensation or the termination of an agency relationship. Our commercial solicitors have a thorough and in depth knowledge of the Regulations and will be able to advise you on the pros of cons of appointing an agent or being appointed as an agent
A business may wish to enter into a distribution agreement within a market where they may have limited or no presence. A business may wish to enter into a distribution agreement with a distributor who has a strong presence or market share within a certain market with the result being increased sales and profile. A distribution agreement is a popular alternative to an agency agreement as it allows a business to exploit local knowledge and market share with out being subject to the Commercial Agents (Council Directive) Regulations 1993. The prime description between agency and distribution agreements is that with an agency arrangement the goods do not pass to the agent and the contract remains with the business. The agent merely acts on behalf of the business and usually takes a commission. With a distribution agreement the ownership of the goods passes to the distributor who then sells them directly to the customer.
A common method used by businesses seeking to increase their profile and profits is to enter into a franchise agreement. Under a franchise agreement the business will allow other companies to purchase the “model” of their business, common examples of franchises are Subway and McDonalds who benefit from increased revenue and profile but control the brand. For a franchisee they can rely on ready made goodwill.
Our commercial solicitors have an excellent knowledge of the legal and commercial considerations required for agency, distribution and franchise agreements and can assist in the preparation of the commercial agreement to suit your needs. Our commercial solicitors can also advice individuals or businesses on the legal and commercial issues on becoming and agent, distributor or franchisee.