Shacking Up

In an effort to reduce cost and maximize revenues, organizations sometimes co-locate, or purposefully hold their meetings and/or expositions at the same time and location as another related group. The co-location can be mutually beneficial for all: Each organization can take advantage of the synergy of benefits created by pooling its respective attendee or exhibitor bases while still maintaining its own unique identity and purpose. But before entering into formal agreements, organizations must carefully consider both the short- and long-term ramifications of their co-location arrangements.

First, clearly identify why co-locating your event is beneficial to your organization. Once you have determined that the benefits substantially outweigh the negatives, pay particular attention to the use and protection of each organization's proprietary information as well as the retention of each co-located event's individual identity and purpose. Trademarks, copyrights, and confidential-information provisions in the agreement will help to establish this. These types of provisions should unmistakably state that each party will remain the sole and complete owner of its respective events and of all specific materials and data of thereof. These provisions should also state under what circumstances each organization will share the other party's proprietary information or trademarked materials, and how each party can use the materials and trademarks jointly developed for the co-located event after the event.

Next, determine if venue and vendor services contracts will be negotiated and contracted jointly or separately. Joint agreements enjoy the economies of scale and the cost benefits derived from increased bargaining power; however, joint agreements introduce the possibility that one or both parties could default on or breach its respective obligations, causing cancellation or liquidated-damages fees or guest-room attrition fees. This issue should be addressed in the contract as well as whether the liability and/or payment of damages under certain circumstances (i.e., cancellation, liquidated damages, or force majeure) will be joint or separate.

The issues of cost allocation and revenue sharing between the parties must also be addressed in detail. How and on what basis will costs be allocated? Will revenues derived directly from the co-located events be shared equally or divided proportionately? Clearly define the division of work and responsibilities between the parties and incorporate a timeline that outlines when each task or obligation will begin and be completed.

Numerous other, equally important issues also require proper consideration in order to draft a well-thought-out agreement, so be sure to talk with others who have already traveled this road. Seeking the advice and guidance of industry and legal professionals who have experience drafting co-location agreements can prove to be an extremely beneficial and cost-saving measure in the long run.





Sidebar
Keeping It Clear
Every co-location agreement should include financial auditing procedures that set forth a mechanism to ensure transparency regarding actual costs and revenue, to avoid potential conflicts and unnecessary litigation.


Mark Roysner, principal with the firm Roysner & Associates, is a practicing attorney specializing in the exhibition and meetings industry. He can be contacted at [email protected]