What Is A Turn Key Agreement

Turnkey refers to something that is immediately ready to use, usually used for the sale or delivery of goods or services. The word is an indication that the customer, after receiving the product, must simply turn the contact key to make it operational, or that the key must be handed over to the customer. [2] Turnkey is often used in the construction industry, for example when it comes to the pooling of materials and work by the builder or general contractor to complete the house without the owner`s involvement. The word is often used to describe a house built on the developer`s land, with developer funding ready to move in for the client. When a contractor builds a “turnkey house,” he frames the structure and finishes the interior; It`s all over to the cabinets and carpets. Turnkey is also commonly used in motorsport to describe a car that is sold with a powertrain (engine, gearbox, etc.) unlike a vehicle that is sold without a vehicle, so that other components can be reused. The volume of private sector investment is generally small and short-term. This type of agreement generally does not provide a strong incentive to conclude a project at an early stage. This type of private sector involvement is also called design construction. The following figure shows the typical structure of a turnkey contract.

A turnkey computer system is a complete computer with hardware, operating system and applications specially designed and sold for certain commercial requirements. A turnkey company is a ready-to-use company, which is present in a state that allows for immediate operation. Multi-level direct selling and marketing (MLM) companies such as Mary Kay can also be considered turnkey businesses based on the short time it takes to operate. Often, a person must register only as an advisor to the relevant department and pay a fee for the inventory required to carry out the work. A turnkey operation is an agreement whereby the supplier assumes responsibility for all necessary recruitments and, ultimately, makes the activity available to the new operator only after meeting the above requirements.