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Concession Agreements 19
2.1.9 Audit
All concession agreements should include provisions which permit the review of all books, and
applicable records to substantiate the accuracy of the sales and other information reported to the
airport. Typically these provisions also require the concessionaire to pay the expenses of the audit
if underpaid fees are more than a specified percentage.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 2, Concession Agreements, for an
excerpt from the DFW concession lease agreement regarding the right to audit for up to 3 years
after expiration or termination of the lease.
2.2 Service and Operational Terms
2.2.1 Exclusivity of Concession Rights Granted
Car rental operators are not granted exclusive rights. Until the 1990s, other terminal conces-
sions had sometimes been granted exclusivity but that is now a rare practice at large or medium
hub airports.
2.2.2 Hours of Operation
Hours of operation should match airline operations. Ideally, terminal concessions should be
open prior to first departure. The final arrival and final departure should govern how late conces-
sions are open, with landside concessions being open until either the last departure or last arrival's
bags are on a bag claim belt. This should be specified in the contract, and monitored monthly for
revisions.
2.2.3 Personnel and On-Site Manager Requirements
Qualified, on-site, professional management must be required in the terms of the agreement.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 2, Concession Agreements, for an
excerpt from the MSP Concessions General Terms & Conditions.
2.2.4 Street Pricing
Terminal retail concessions are operated under various street pricing assumptions. Agreements
at U.S. airports have pricing policies ranging from strict street pricing to street plus an additional
5 to 10%. Other agreements do not restrict pricing at all. Pricing policy is a major determinant in
establishing rent and term lengths, because it greatly affects expected revenues in the pro forma
income statement. Airports are encouraged to establish the most competitive pricing policy pos-
sible that will still allow them to achieve their goals for revenue and customer service. Most car
rental agreements do not address the issue of street pricing. The percentage rents and other con-
cession fees may require the car rental companies to price airport rentals higher than off-airport
which is why most airport car rental agreements are silent on this subject.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 2, Concession Agreements, for the
RDU Concessions Pricing Policy 2009.
2.2.5 Maintenance of and Title to Improvements
Maintenance arrangements between airports and terminal concessions tenants are becoming
more specific, because these responsibilities had been the source of uncertainty in the past.
