Before I started working with restaurants as an attorney, I did not know anything about the concept of percentage rent. I didn’t even know it existed. If you are reading this, you probably understand the basic idea of percentage rent, but if not: it is where a tenant pays a percentage of its annual revenues […]
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Percentage Rent in your Restaurant Lease
Many people new to the restaurant business are unfamiliar with the concept of percentage rent. In a restaurant lease, percentage rent provisions allow the Landlord to share in the profits of the business, often in exchange for a lower base rent. The idea is that if the restaurant makes a lot of money, the Tenant […]
Read more...Dealing with Coronavirus Uncertainty in Your Restaurant Lease
The ongoing health crisis, restaurant shutdown, and general economic uncertainty have made these unprecedented times for the hospitality industry. Many restaurants may close forever, and many others that were in development may never open in the first place. That being the case, it is understandable that many restaurant owners have halted expansion plans, and many […]
Read more...Coronavirus Rent Relief for Restaurant Tenants: Deferrals vs. Abatements
Tomorrow is April 1, which is the first day since the coronavirus restaurant shutdown that many restaurant tenants will be required to pay rent. Many, quite simply, will not be able to do so and are seeking relief from their landlords. For those able to obtain such relief, it will likely come in the form […]
Read more...COVID-19 Shutdown: Default Provisions and Restaurant Leases
With April 1 approaching, and April rents coming due, many restaurants are contemplating simply not paying rent, thinking that with courts being closed there is little landlords can do in response. Before even considering this, however, it is critical that tenants understand the default provisions in their leases. Here are some key questions to answer: […]
Read more...The COVID-19 Coronavirus and Key Restaurant Lease Terms
No industry has been more broadly and significantly affected by the current COVID-19 health crisis than the nation’s restaurants. The most common, and in many cases, most pressing question we have been getting from our restaurant clients is “What does my lease say about this?” The answer has been pretty much universal: “Nothing.” This is […]
Read more...You Should Hire a Restaurant Real Estate Broker
We work with lots of clients who are thinking about opening their first restaurant, or who are in expansion mode. When I get one of these calls, among my first questions is “are you working with a broker?” If not, I always try to encourage them to call one of the many experienced restaurant real […]
Read more...Limiting the Personal Guaranty in Your Restaurant Lease
If you are getting ready to sign a restaurant lease, you are almost certainly being asked to provide the name of someone who will provide a personal guaranty of payment on the lease. This person, whether it be you yourself, or someone with whom you are associated, will be personally on the hook if the tenant (usually an […]
Read more...New Restaurant Location? Strongly Consider a New LLC.
I often say that opening a restaurant is like becoming a parent. It keeps you up late at night, it occupies most of your time and attention, it makes you worry whenever you leave it with someone else…. But like parenthood, restaurant ownership can also get easier over time. And, when it does, you may […]
Read more...Tough Market Makes a Good Restaurant Lease More Important than Ever
2017 has not been the easiest year for restaurants, particularly for sit down casual dining restaurants. Reports of store closures, missed earnings, and abandoned concepts have been a common occurrence this spring, as restaurants have tried to recover from its worst year since the recession. Even fast casual chains, which had been thought to be insulated […]
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