Framework agreements in trade fair construction

It is not uncommon in the trade fair industry to conclude framework agreements that define the cooperation over several years between the contractual partners stand builder and exhibitor. Especially during the trade fair cancellations due to the coronavirus pandemic and an uncertain legal situation in this regard, the framework agreement policy was a blessing for stand builders and exhibitors. With this basis, the parties were able to find a common way to come to an agreement in a spirit of partnership in such a volatile and uncertain time with a sometimes opaque legal situation.

But could it be that framework agreements and the associated long-term commitment to a service provider are limiting a company's agility and causing disadvantages?

In this blog article, we will look at the basic opportunities and risks of framework agreements in stand construction and report on our experiences as stand builders. We hope that this article will help you with your future trade fair stand planning decisions.

Opportunities of framework agreements

The VUCA world is not standing still and, in addition to the coronavirus pandemic and the war in Ukraine, the economy is constantly facing new challenges. These factors make exhibition stand construction projects complex (mind you - not complicated!).

Example: In 90% of all our exhibition stand construction projects realised in Q3 2022, lorry transports were delayed, sometimes by a day. This led to enormous stress and further project postponements that could only be handled with extreme additional effort.

It is therefore no coincidence that the conclusion of framework agreements is very popular in the trade fair industry, especially for higher order volumes. Let's take a look at what speaks in favour of concluding framework agreements:

General cost benefits

With a framework agreement for exhibition stand construction that includes several exhibition stands in successive years, you as an exhibitor will be able to achieve a more favourable price than if you were to order the projects individually. Due to the high order volume, your stand constructor will grant you a discount on the total amount.

In addition, you benefit from constant conditions during the contract period. This can be of great benefit to you as a company, particularly in the event of an impending recession.

Less negotiation effort

With a framework agreement, you no longer have to negotiate each of your trade fair appearances individually. This reduces the administrative workload in your relevant departments. Instead of investing a lot of time in negotiating the conditions of individual contracts with your stand builder, with a framework agreement you benefit from long-term, consistent conditions that only need to be negotiated once for a specific period. The one-off expense of setting up a framework agreement is particularly worthwhile for regular participation in trade fairs.

Planning security for exhibitors and stand builders

As stand constructors, we are always interested in long-term business relationships. You certainly do too. Framework agreements over a longer period of time or over several trade fair events offer planning security for both contractual partners.

We have to face the challenge that there is an extreme shortage of skilled labour in Germany. Good construction teams are fully booked for many months (fortunately, we have long-term accredited teams, but they are also paid accordingly). However, with a certain lead time and stringent planning, even these challenges are manageable. A framework agreement provides the basis for predictability.

Cost distribution of exhibition stand construction projects

In the case of framework agreements, we as a stand construction company calculate the investment costs of the first trade fair, for example, pro rata to the number of planned events. This means that the costs per trade fair are lower and the exhibitor can benefit from advantages in the annual depreciation. Exhibition stand constructors and exhibitors can jointly define how the costs are allocated to the number of events and thus negotiate an optimal solution for both parties.

Attractive and secure cancellation agreements

Individual contracts are usually concluded on the basis of the German Civil Code (BGB) or the General Terms and Conditions. When concluding a framework agreement with WWM, the contractual bases apply in the following order:

• Individual project contract,
• WWM framework contract,
• WWM GTC
• provisions of the BGB.

This means that our framework contract partners benefit from very good cancellation conditions, which are much better than those in the BGB or, in the case of individual contracts, in our GTCs.

Flexibility in trade fair design

Flexibility as an advantage with framework agreements? We have learnt from experience that our framework contract structure allows changes to the trade fair stand design from one trade fair date to the next. This is because each project is planned individually and in good time before the event and adapted as part of the framework contract agreements. A framework contract therefore does not mean being tied to a design for years to come.

Risks of framework agreements

Where there are opportunities, there are also risks. These must also be examined on a case-by-case basis.

Long-term conditions

A blessing and a curse at the same time! In the current economic situation, we are all happy about prices remaining the same, because everything tends to be more expensive. But we would be just as annoyed if prices suddenly fell again over a certain period of time and we were left with the more expensive, pre-defined costs of a framework agreement. However, when has something become cheaper in recent years? So this risk can almost be ruled out.

Penalties for breach of contract  

The previously good gut feeling turns out to be wrong. You had imagined the collaboration with the stand builder to be different and you are not at all satisfied with the results of the exhibition stands. Even after several discussions, there is no improvement in sight. However, cancelling the framework agreement in advance is usually associated with penalties and must therefore be carefully considered before taking this step. It therefore makes sense to realise the first projects with a new stand constructor as an individual contract solution. A framework agreement only feels good once you have built up trust with the stand constructor.

Lack of flexibility

The framework agreement defines, among other things, the number of projects that the stand builder will realise for you. However, sometimes new business areas arise over time or you realise that you reach your target group particularly well at trade fairs and would therefore like to increase the number of trade fair appearances. However, you may also want to reduce the number of trade fair stands because you no longer need 1-2 trade fair locations.

It should therefore be possible to adjust the framework agreement during the term.
It is also possible to agree several framework agreements for the handling of different exhibition stand packages. There are solutions here to remain flexible.

For whom is a framework agreement worthwhile?

Companies - be it the stand construction company or the exhibitor - are usually interested in a long-term commitment. The advantages of framework agreements apply to both parties, provided the following criteria are met in advance:

• You have a collaborative relationship with your stand builder: communication plays a very important role here! If in doubt, always enter into a joint discussion and try to find a satisfactory solution for both parties. Especially during the coronavirus pandemic, we have found that there is a solution for everything. It's just important to always communicate this openly and honestly.
• You have experience of working with your stand builder: nobody wants to be tied to someone whose work results they are dissatisfied with. It's different if you've been working with the same stand builder for years and the experience you've gained together says otherwise.
• You regularly take part in trade fairs: Whether it's one large trade fair a year or many smaller events spread over several months of the year. A framework agreement is particularly worthwhile if you use the services of a stand builder several times over a defined period of time. But even just one event per year can make sense in terms of good cancellation agreements.

If these criteria are met, we can say from our side: yes, a framework agreement makes sense and the opportunities outweigh the risks. And how do you see it?