What is a vendor agreement?
A vendor agreement is a contract between a vendor mall and an individual vendor that spells out the terms of their arrangement.
Unlike a consignor agreement (where someone drops off items and the store manages everything), a vendor agreement governs a relationship where the vendor is running their own business within your store.
What to include in a vendor agreement
Booth details
Describe the space being rented — booth number or location, square footage, and any physical boundaries. If the vendor is allowed to adjust shelving, hang signage, or modify the space in any way, say so here. If they're not, say that too.
Rent and fees
If your store charges booth rent, state the monthly amount, the due date, and accepted payment methods. Specify whether rent is prorated for a partial first month. Include late fees — the amount and when they kick in.
List any other fees the vendor may encounter:
Credit card processing fee — often deducted from vendor earnings as a percentage of sales
Cleaning or maintenance fee — if the store handles any booth upkeep on the vendor's behalf
Early termination fee — if a vendor exits before an agreed lease term ends
Fees aren't inherently a problem. Surprise fees are.
Sales commission
If your store takes a percentage of vendor sales, spell it out here. State the commission rate clearly, and note whether it applies to all sales or only certain categories. If your store charges both rent and a commission, make the relationship between the two explicit — vendors need to understand their full cost of doing business in your space.
Lease term and termination
How long is the initial agreement? Month-to-month and annual arrangements are both common in vendor malls. Be clear about:
How much notice either party must give to end the arrangement
What constitutes grounds for immediate termination (nonpayment, policy violations, etc.)
What happens to a vendor's merchandise if they're removed or abandon their booth
Vendor rules
This is where you set expectations for how vendors operate within your store. Cover:
Booth maintenance — how clean and organized does a booth need to be kept? Who is responsible for dusting, restocking, and upkeep?
Restocking requirements — some stores require vendors to restock at regular intervals or maintain a minimum inventory level
Restricted items — anything you won't allow in the store (certain product categories, counterfeit goods, hazmat, etc.)
Access hours — when can vendors enter the store to tend to their booth? During business hours only? By appointment?
Signage and display standards — any rules about how booths can be decorated or branded
Sales and checkout
Clarify how transactions work. In most vendor malls, the store runs a central checkout and vendors are not present for their own sales. Specify:
Who processes sales (the store, the vendor, or both)
Whether vendors are permitted to run their own sales or markdowns, and how those are communicated to staff
How sales tax is handled
Payout terms
Explain how and when vendors receive their earnings. Cover:
Payout schedule — weekly, biweekly, or monthly; on a fixed date or on request
Payout method — check, ACH, cash, or other
Deductions — rent, commission, and any other amounts taken out before the vendor receives their balance
Minimum balance — if you require a minimum earned balance before issuing a payout, state it
Liability
Include a clause that limits the store's liability for stolen, damaged, or lost merchandise. Vendor mall operators can't be responsible for every item across dozens of booths. Make sure vendors understand this and consider whether you want to recommend they carry their own insurance.
Marketing rights
Add a line giving the store the right to photograph booths and merchandise for use in marketing. Most vendors will appreciate the exposure — just make sure it's in writing.
Common vendor agreement mistakes
Not having one. A written agreement prevents disputes over booth terms, unexpected fee complaints, and confusion about payouts or stocking schedules. Handshakes or verbal agreements seem like they will work until they don't.
Being vague about the financial structure. If you charge both rent and a commission, make sure the agreement says so clearly — and that vendors understand how both interact with their payout. A vendor who only sees the rent line and misses the commission rate will feel misled when they see their first check.
Vague termination language. "Either party can end the agreement" is not a termination policy. How much notice is required? In writing or verbally? What happens to merchandise during a dispute? Nail this down before you need it.
Leaving house rules out of the agreement. Posting rules on a bulletin board in a back room doesn't make them enforceable. If a vendor can be removed for violating a rule, that rule needs to be in the agreement they signed.
Not addressing abandoned booths. Vendors occasionally disappear — stop restocking, stop responding, stop paying rent. Your agreement should specify exactly when a booth is considered abandoned and what the store is permitted to do with the merchandise left behind.
Using a generic lease template. A standard commercial lease isn't written for a vendor mall. The checkout structure, the payout relationship, the vendor rules — none of that fits a boilerplate office lease.