Concession Agreement

What is a 'Concession Agreement'

A concession agreement is a negotiated contract between a company and a government that gives the company the right to operate a specific business within the government's jurisdiction, subject to certain conditions. A concession agreement may also refer to an agreement between the owner of a facility and the concession owner or concessionaire that grants the latter exclusive rights to operate a specified business in the facility under specified conditions. Regardless of the type of concession, the concessionaire usually has to pay the party that grants it the concession ongoing fees that may either be a fixed amount or a percentage of revenues.

BREAKING DOWN 'Concession Agreement'

Concession agreements span the gamut, from mining concessions valued in the hundreds of millions, to a small food and beverage concession in a movie hall. The terms of a concession agreement also depend on its desirability. For example, a popular concession in a sports stadium may not offer much to the concessionaire in terms of incentives. On the other hand, a government that is looking to attract mining companies in an impoverished area may offer significant inducements, such as tax breaks and a lower royalty rate.

RELATED TERMS
  1. Concession

    A selling group's compensation in a stock or bond underwriting ...
  2. Trading Partner Agreement

    An agreement drawn up by two parties that have agreed to trade ...
  3. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities. ...
  4. Conditional Sales Agreement

    A lease agreement banks can offer to business customers that ...
  5. Offtake Agreement

    An agreement between a producer of a resource and a buyer of ...
  6. Credit Agreement

    A legal contract in which a bank arranges to loan a customer ...
Related Articles
  1. Investing

    The LLC Operating Agreement Template, And Why You Need It

    For some business owners, creating an LLC offers the best of both worlds. But your state's rules might not suit your needs. Hence the Operation Agreement.
  2. Entrepreneurship & Small Business

    Which Type of Organization Is Best For Your Business?

    Learn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
  3. Entrepreneurship & Small Business

    5 Reasons Small Business Owners Sell Their Companies

    Selling a business you've built from scratch isn't done lightly. Consider these moments when the opportunity might be right for you.
  4. Insights

    The NBA’s Business Model

    Drawing interest domestically and abroad, the NBA has seen its popularity and revenue streams rapidly increase over the past few years.
  5. Investing

    UPS, Pilots Reach Tentative Labor Agreement (UPS)

    This tentative five-year agreement with the Pilots union comes after nearly five years of negotiations.
  6. Markets

    How Major League Baseball Makes Money

    Major League Baseball is big business. Let's take a look at where the money comes from.
  7. Markets

    How Offtake Agreements Work

    An offtake agreement is a legal business agreement between a buyer and a seller.
  8. Personal Finance

    Explaining the Income Approach

    The income approach is one of the three main methods that appraisers use to value property.
  9. Retirement

    Create A Pain-Free Postnuptial Agreement

    This marital contract can underline your love for each other - not undermine it.
  10. Entrepreneurship & Small Business

    Government Grants for Women-Owned Businesses

    Explore options for financial grants as a female business owner, and discover helpful resources for alternate ways of funding a business, including loans.
RELATED FAQS
  1. Which terms should be included in a partnership agreement?

    Understand what specific terms should be included in a business partnership agreement and how each affects the partners in ... Read Answer >>
  2. Under what circumstances would someone enter into a repurchase agreement?

    Learn when investors want to enter into a repurchase agreement, such as to gain quick access to liquidity and enjoy flexibility ... Read Answer >>
  3. What changes should be made to our life insurance coverage?

    We began as a small company where the two founders purchased $1M in life insurance on each other. This... Read Answer >>
  4. How are the profits split between a general partner and a limited partner in a real ...

  5. How risky is it to invest in metals and mining companies with operations in politically ...

    Learn about a number of risk factors such as tax policies and changes in fees that can affect a mining company operating ... Read Answer >>
  6. What tax implications are there for parties involved with a reverse repurchase agreement?

    Learn about the tax consequences that the buyer can face as a result of a reverse repurchase agreement ("reverse repo") with ... Read Answer >>
Trading Center