One of the most important provisions in any restaurant lease is when the tenant has to start paying rent. We call this the “rent commencement date” in most leases (or “RCD” for short) and it is rarely the date the lease is signed, or even when possession is turned over to the tenant. Rather, the tenant is […]
Read more...Category: Leasing
Are You Paying Too Much in Percentage Rent?
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 […]
Read more...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...Maryland Liquor Licensing and Choice of Restaurant Lease Entity – Making the Pieces Fit
Here at The Morris Law Firm, we are big advocates of our restaurant clients not doing things piecemeal when it comes to opening their new locations. For example, we think it is big mistake to pick a location, set up a new business entity, negotiate and sign a lease, and then think about liquor licensing. We […]
Read more...LLC or Corporation? How the Choice Can Effect your Maryland Liquor License.
One of the key questions we are often asked by startup restaurant businesses is what type of business entity the founders should form – a corporation or a limited liability company. There are multiple factors that go into the corporation vs. LLC decision, of course — taxation, management, liability protection, investment structure, etc. But […]
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...