Under this definition, an agreement made by a third party includes undocumented, oral and hand-shaking contracts. These could have been created a few or many years ago by someone who no longer works in your company. It doesn`t matter. These contract manufacturers, brokers, agents and resellers all count as suppliers and must be part of your assessment of third-party agreements. A management agreement often contains a number of specific criteria that determine whether the management company can continue to manage a hotel. The criteria may include: a “third party,” as defined in OCC 2013-29, is any entity with which a company does business.  This may include suppliers, suppliers, contract manufacturers, business partners and associates, brokers, distributors, resellers and agents.  Third parties may be both “upstream” (suppliers and suppliers) and “downstream” (distributors and resellers) and out of contract.  Due to trends towards specialization and outsourcing, companies, which are increasingly focusing on core skills, are hiring more third parties to perform key functions in their value chain;  Third-party activity is generally responsible for the fact that it accounts for about 60% of total sales.  This trend leads to a greater number of critical third-party relationships throughout the economy that, in the case of companies that have tens of thousands and even hundreds of thousands of third-party relationships, can become cumbersome to monitor and manage manually. Third-party management is the process by which companies monitor and manage interactions with all external parties with whom they have a relationship.
This may include both contractual and non-contractual parties. Third-party management is conducted primarily to assess the current behaviour, performance and risk of any third-party relationship with a company. Monitoring activities include vendor and supplier information management, corporate compliance and social responsibility, vendor risk management, IT risk, anti-corruption/anti-corruption compliance (ABAC), information security (Infosec), performance measurement and contractual risk management.  The importance of third-party management was reinforced in 2013, when the US Office of the Comptroller of the Currency mandated that all regulated banks must manage the risk of all their third parties.  Hotel and motel owners often determine that their limited time and resources require the employment of an external manager to maximize the profitability of a property. This is particularly the case when a family business decides to extend its property on one or two properties in order to cover several sites of different income. Management agreements come in all forms and sizes, but the issues you need to focus on as an owner remain constant. This article analyzes these issues and examines the pros and cons of negotiating an external management agreement.