HiRUM Software Solutions

Buying Management Rights? – learn how to protect your new business’s assets before you buy

Posted by HiRUM Software Solutions - 09/08/2017
Buying management rights?

There have been many occasions where the ownership of a domain name or a business’s social media pages has become the target of hostility between companies, third parties, and the new owners of a property, all believing they have ownership of these. The most difficult time is when a hotel or resort changes hands, but no reference is made in the contract of sale as to the ownership of the website, the domain name or the social media pages. The reason behind this is often quite alarming, the sellers simply don’t think of these when selling the business, and the buyers simply don’t know to ask!

In some instances, web companies have struck deals with hotels to build and maintain the property’s website, in return for a fixed fee or percentage of bookings.  Occasionally, the Management Rights buyers just get caught in a web of legal documents, costs and in the stress of buying a new business, to think about every little aspect of the sale.

It is usually not until they new owners try to move away from the current web company, or realise the seller has simply ‘turned off’ the property’s website, and all social media accounts that they find themselves in a difficult position.

Starting from scratch is not always easy either, purchasing a new Domain Name, building a new website, and creating new social media accounts all cost valuable time and money, making it not only a stressful and time-consuming exercise but it can also result in lost business, whilst you are waiting for your new website and social media accounts to be developed.

Taking the time to really understand what you are buying into is always good advice. In this day and age, your website, domain name, and your social media pages (including your Google ‘My Business’, Google+, Facebook, and twitter accounts) are some of the most valuable assets your business has, especially when it comes to the traffic they can bring to your business. With the ever-increasing growth of the online market, social media and mobile apps, it so much easier for customers to book and pay for accommodation online, so it’s important you protect these valuable assets.

When entering into an agreement, it is important to ask the previous owners to write into the contract, as a separate clause, that you will receive and retain ownership of these assets, and that they will not transfer ownership of your domain or social media pages at any stage.

Before signing on the dotted line and buying management rights, it is also important to understand the payment terms for the property’s website, will you own your site outright? or is this with a third-party provider that takes commissions from any bookings you receive from the site? Are you able to make changes yourself or are you reliant on the third party? If run by a third-party how much are the costs? what are the terms of the contract? ie. is Search Engine Optimisation included or Google Analytics reporting, web hosting?

There are so many things to consider and so little time! My advice would be to gain as much information you can as to the marketing assets and social media accounts owned by the business, and ensure ownership of these ‘by you’ is written specifically into the contract of sale.

Looking at getting into Management Rights, and wondering what to look for, what to ask for, from the current owners, feel free to call the team at HiRUM 07 5574 4990 or contact us at info@hirum.com.au, and we will be happy to help.


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