A management agreement is a contract between the facility owner and an operator. The owner retains the freehold or leasehold asset, while the operator runs day-to-day business under agreed KPIs. The operator is paid a base management fee plus performance-based incentives linked to revenue.
This model allows owners to benefit from sector expertise without giving up control of the asset. It also aligns incentives: the operator only earns more when the facility performs better.