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What is the definition of “management fee” in a contract to operate one of the business of a corporation.

Operating the business has 11 major personnel and requires a clerk to attend to the attendance, payroll, monthly reports preparation of the operation and supplies custodian . The corporation do not include the clerk as operating expense but as part of the management fee. Th contract for the management fee is computed from the gross sales of the operation.

Corporate management fees are charges to cover management operations that are handled at the corporate level and then allocated to the businesses. Administration is the biggest issue (often sales is a corporate function). There is a function in administration that is actually located at teh operation and that is the clerk. So they pay the clerk and include that in the fee.

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