Chain Leader Mobile
Log In  |  Register          Free Newsletter Subscription
Zibb
FREE subscription
Email
Print
Reprint
Learn RSS

Real-Estate Leases: Avoiding Death by Clause

Declares franchise consultant Ryan Cunningham: "Leases can kill businesses." That is, unless you can get rid of damaging clauses or water them down. Cunningham offers some examples.

By David Farkas, Senior Editor -- Chain Leader, 7/1/2009

Declares franchise consultant Ryan Cunningham: “Leases can kill businesses.” Need an example? Say the anchor in your shopping center goes dark and you've signed a 10-year lease. “You are stuck,” says the former tenant representative for Jones Lang LaSalle and currently president of Javelin Solutions. That is, unless you can get rid of damaging clauses or water them down. Cunningham offers the following examples:

real-estate mappingWalk-away clause If the tenant doesn't receive funding, use variance or permit, the lease is null and void.

Performance clause If the tenant doesn't achieve a stated gross revenue by a certain date, the lease can be terminated with minimal penalty (for example, three or six months' rent or unamortized tenant improvement).

Vacancy clause If the property loses an anchor or a tenant, or falls below X-percentage occupancy, the tenant's rent drops by X-percent. If the anchor is not replaced in a fixed period, the tenant can cancel the lease.

Signage Top-of-monument signage is no longer reserved for the tenant who occupies the most space.

Rent vs. tenant improvement tradeoff Landlords short of cash should be willing to disproportionally reduce rent if the tenant is willing to fund a larger amount of tenant improvements.

MORE: Small restaurant chains are attracting landlords like never before. But before jumping at the next great site, they might want to borrow ideas from the big boys.

Email
Print
Reprint
Learn RSS

Talkback

We would love your feedback!

Post a comment

» VIEW ALL TALKBACK THREADS

Related Content

Related Content

 

By This Author

Reed Business Information Resource Center

Featured Company


Most Recent Resources


Sponsored Links

 
Advertisement

More Content

  • Blogs
  • Podcasts

Blogs

  • David Farkas
    Dave's Dispatch

    November 17, 2009
    "Structural Change" is Coming
    Here's a succinct analysis of what's hurting restaurant sales. It comes via Jeffrey Bernstein, a sharp restaurant ......
    More
  • David Farkas
    Dave's Dispatch

    November 16, 2009
    In the Realm of Kings
    This weekend I dropped by a Kings Restaurant in Monaca, Pa., some 30 miles northwest of Pittsburgh. I hadn't been in one of t......
    More
  • View All BlogsRSS

Podcasts

  • Blake Rohrabaugh
    Bottoms Up: Drink Menu Trends at Bar Louie
    When Beverage Director Blake Rohrabaugh joined Bar Louie, in 2003, the Glenview, Ill.-based chain had just nine units. It has since added 43 and now totals 52 restaurants in 17 states. Rohrabaugh, who describes the concept as a "hip, laid-back neighborhood bar" with a 50-50 food and beverage sales mix, talks about blunting the recession with promotions, getting help from vendors and winter drink trends. Hear It Now

    Sign up for the VIP Radio Podcast RSS feed

    View All Podcasts Subscribe Now to VIP Radio and never miss an episode
Advertisements





NEWSLETTERS

Get restaurant industry news, trends and business-critical information delivered directly to your inbox!

Chain Leader Executive Briefing
Quick Service Reporter
Newsfeed
Recipes & Ideas
eBurger, eBurger
Beverage Briefing
Regional Cuisines
Noncom Niche
In Balance
R&I and Chain Leader eMarketplace
Flashnews
Service Insights
The Specifier
When to Replace
FE&S eMarketplace
HOTELS' Daily News Service
HOTELS' eMarketplace

Please read our Privacy Policy
About Us   |   Advertising Info   |   Site Map   |   Contact Us   |   FREE Subscription   |   Useful Sites   |   RSS   |   Help
© 2009 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Use of this Web site is subject to its Terms of Use | Privacy Policy
Please visit these other Reed Business sites