Sign At Your Own Risk: The Sequel … More Critical Lease Provisions to Negotiate or Avoid

In our last article for Modern Restaurant Management (MRM) Magazine, we discussed some of the critical lease provisions contained in a franchisee’s lease which, if not identified and properly negotiated, could have a material impact on the viability of a business. The provisions addressed in that issue – exclusive use protection, landlord’s consent to assignment and continuing liability thereafter, and the landlord’s right to participate in the sales proceeds – only scratched the surface.

In this issue, we present three more highly important provisions, which are often mistakenly (or sometimes even intentionally) overlooked in the rush to finalize a lease and get it signed.

Non-CompeteFrom the landlord’s perspective, they don’t want a tenant to open another location that might adversely affect that tenant’s sales in the landlord’s shopping center which could adversely impact the tenant’s ability to meet its rental obligations under the lease.

Leases are…