This Agreement is made between The Deal Board Ltd (the "Deal Sourcer") and the Operator named below (the "Operator") in relation to the property being operated by the Operator (the "Property").
1. Purpose
1.1 The Deal Board has introduced/sourced the Property to the Operator. The parties agree that The Deal Board's standard deal sourcing fee is £3,000.
1.2 Instead of the full £3,000 sourcing fee being paid upfront, the parties agree that it will be paid through the profit-share arrangement set out below.
2. Profit Share
2.1 The Operator shall pay The Deal Board 50% of the Net Profit generated from the Property.
2.2 The remaining 50% of Net Profit shall be retained by the Operator.
2.3 The profit share shall begin from the date the Property first generates revenue under the Operator's operation and shall continue until The Deal Board has received a total of £3,000 under this Agreement.
2.4 Once The Deal Board has received £3,000 in total, the profit-share arrangement shall automatically end and no further profit-share payments shall be due. Any amount that would cause total payments to exceed £3,000 shall be reduced so that The Deal Board receives no more than £3,000 under this Agreement.
3. Definition of Net Profit
3.1 For this Agreement, "Net Profit" means the gross accommodation/booking revenue actually received from the Property, less only the following costs attributable to the Property:
- rent payable by the Operator to the Property Owner under the lease of the Property;
- utility and household bills relating to the operation of the Property;
- booking-platform fees and commissions; and
- third-party property/serviced-accommodation management charges.
3.2 No other costs may be deducted when calculating Net Profit unless both parties agree otherwise in writing.
3.3 In particular, the purchase or cost of furniture, furnishings, appliances, equipment, linen, household items or other setup items shall not be deducted from revenue when calculating Net Profit.
3.4 The cost of repairs, maintenance, improvements, alterations, refurbishment or any other works required at or carried out to the Property shall not be deducted from revenue when calculating Net Profit.
3.5 For clarity, the rent payable by the Operator to the Property Owner under the lease of the Property is a permitted deduction and shall be deducted from gross accommodation/booking revenue before Net Profit and the 50/50 profit share are calculated.
4. Reporting and Verification
4.1 The Operator shall maintain accurate records of revenue and permitted deductions relating to the Property.
4.2 The Operator shall provide The Deal Board with reasonable evidence needed to verify the calculation of Net Profit, including relevant booking-platform statements, management statements, invoices or revenue reports.
4.3 The Operator shall not divert, conceal or intentionally misstate bookings, revenue or permitted costs for the purpose of reducing the profit-share payment.
5. Statements and Payment
5.1 Within 7 days after the end of each calendar month in which the Property generates revenue, the Operator shall provide a statement showing gross revenue, each permitted deduction, Net Profit, the 50% amount due to The Deal Board and the remaining balance of the £3,000 sourcing fee.
5.2 Any profit-share payment due to The Deal Board shall be paid within 7 days after the end of that calendar month to a bank account nominated in writing by The Deal Board. All sums are stated exclusive of VAT, if VAT is properly chargeable.
5.3 If Net Profit for a month is zero or negative, no profit-share payment shall be due for that month, and the unpaid balance of the £3,000 sourcing fee shall carry forward.
6. Duration and Early End of Property Operation
6.1 This Agreement continues until The Deal Board has received the full £3,000 sourcing fee, except where the parties agree otherwise in writing.
6.2 If the Operator's lease or operation of the Property ends before the full £3,000 has been paid, all profit-share amounts accrued up to the date of cessation remain due and payable. The remaining unpaid balance of the £3,000 sourcing fee shall not automatically become payable solely because the Property operation ends, unless the parties agree otherwise in writing or the cessation results from the Operator deliberately terminating, transferring or restructuring the operation with the principal purpose of avoiding payment under this Agreement.
7. No Partnership
7.1 Nothing in this Agreement creates a partnership, joint venture, employment relationship or agency between the parties. The arrangement is solely a method of paying The Deal Board's agreed £3,000 sourcing fee.
8. Entire Agreement and Changes
8.1 This Agreement records the agreement between the parties concerning the profit-share payment of the sourcing fee.
8.2 Any amendment to this Agreement must be agreed in writing by authorised representatives of both parties. A failure or delay in exercising a right under this Agreement does not waive that right.
9. Governing Law
9.1 This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement.
10. Authority and Capacity
10.1 Each party warrants that it is duly incorporated and that the person signing this Agreement on its behalf is authorised to bind that company.
10.2 Each party enters into this Agreement in the course of its business and has had the opportunity to obtain independent legal, tax and accounting advice before signing.
11. Severance
11.1 If any provision of this Agreement is held to be invalid, unlawful or unenforceable, that provision shall be treated as modified to the minimum extent necessary to make it valid and enforceable. If modification is not possible, it shall be deleted, and the remaining provisions shall continue in force.
12. Counterparts and Electronic Signature
12.1 This Agreement may be signed in counterparts and by electronic signature. Each counterpart shall constitute an original and together they shall constitute one agreement.
13. Eligibility and Qualifying Criteria
13.1 The Operator's company must have been trading for at least 6 months. If the company has been trading for less than 6 months, a personal guarantee from the Operator will be required.
13.2 Where a personal guarantee cannot be provided, the parties may agree an alternative structure of £1,500 sourcing fee paid upfront, with the remaining £1,500 satisfied through 50% of the monthly Net Profit until the full £3,000 sourcing fee has been paid.
13.3 The Property must have an estimated Net Profit of at least £500 per calendar month, whether self-managed or operated through a management company, to ensure the £3,000 sourcing fee can reasonably be recovered within 12 to 18 months.
13.4 The lease of the Property must contain no break clause exercisable before the first 12 months. For example, a 6-month break clause would not qualify for this profit-share arrangement.
13.5 All profit figures referred to in this Agreement are estimates and actual performance may vary depending on occupancy, nightly rates and operating costs.