5 Provisions to Beware of in Your Host Agency Agreement
As a travel advisor, you should have a written agreement with your host agency. Because you typically are an independent contractor, the agreement may impose restrictions on how you operate your travel business (both during and after the relationship). There are certain provisions that are red flags and can cause you significant business risk, so try to have these provisions removed or negotiated prior to signing an agreement.
- Exclusivity – An exclusivity provision requires you to conduct your travel business solely through the host agency and prohibits you from working with other agencies or hosts. This definitely is the type of provision that you should try to strike, as a broad exclusivity clause could limit your ability to maintain outside business relationships or pursue opportunities that are unrelated to the host agency, especially if you are seeking to switch hosts.
- Non-Compete – A non-compete restricts your ability to operate a competing travel business during or after your relationship with the host. Look closely at the provision’s duration, and geographic scope, as well as the definition of “competition.” Depending on applicable state law, some non-compete provisions may be difficult or impossible to enforce. In any event, you should strike this provision or negotiate something short in duration and scope.
- Branding and Intellectual Property – Pay close attention to provisions addressing the host agency’s name, logo, trademarks, branding, marketing materials, and other intellectual property. The agreement should make clear what you are permitted to use, where you may use it, and whether the host’s approval is required. Also consider ownership of materials you create as an advisor, including website content, social media materials, photographs, and other marketing assets. Most importantly, understand what happens when the relationship ends. You may be required to immediately stop using the host’s name and branding and remove its logos from your website, social media, email signature, business cards, and other marketing materials. You should also know whether you retain the right to use materials you created independently after termination.
- Customer Lists – Your client relationships may be among your most valuable business assets. Determine whether the agreement treats customer names, contact information, booking histories, preferences, and other client data as belonging to you, the host, or both. Pay particular attention to provisions governing access to customer information after termination and restrictions on contacting former clients.
- Post-Termination Rights – Termination provisions should address what happens to pending bookings, commissions, future commissions, client relationships, and supplier accounts after you leave. Some agreements may allow the host to continue receiving commissions from bookings you generated, while others may impose restrictions on communicating with clients. The agreement should clearly spell out your rights and obligations after termination.
Bottom line: Don’t focus solely on commission splits and host agency benefits. Before signing, understand what you may be giving up and what happens to the business you built if the relationship ends. Try to have an attorney review and advise on the document before you sign.
