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Key Takeaways
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Your commercial lease is the second most critical contract you will sign as a franchisee.
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Commercial leases are drafted to favor landlords, but most terms are fully negotiable.
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A franchise attorney ensures your lease complies with your franchisor’s brand standards.
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Key lease terms include exclusivity, permitted use, personal guarantees, and buildout rules.
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Negotiating through experienced counsel levels the playing field against seasoned landlords.
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Flat-fee lease reviews provide predictable legal costs while protecting your long-term margins.
Signing a one-sided commercial lease can put your entire business at risk, but skilled franchise counsel can negotiate fair terms to protect your bottom line and your investment.
A commercial lease is one of the most important agreements a franchisee will sign. Unfavorable lease terms can create significant financial obligations, restrict business operations, and conflict with franchisor requirements.
At Luther Lanard PC, our franchise attorneys help business owners review and negotiate commercial leases before they sign. We evaluate lease provisions, identify potential risks, and negotiate terms that protect your investment while accounting for the unique requirements of your franchise agreement.
Other than the franchise agreement, the second most crucial agreement for many franchisees will be their lease. We approach leases from two perspectives: (1) making the lease more in your favor; and (2) aligning the lease with your needs as a franchisee.
Many franchisees, unfortunately, consider their lease to be a boiler-plate document that is non-negotiable. As a result, they sign their lease and simply hope for the best. In other cases, the franchisee may try to negotiate their lease independently, which can be ineffective and strain an important relationship right at the outset. Working with an experienced franchise attorney can save you time and help avoid problems in the future.
How Our Franchise Attorneys Review and Negotiate Commercial Leases
To start, we will review the entirety of the lease and inform you of both your and the landlord’s rights, responsibilities, and duties. This includes discussing key deadlines and obligations the franchisee as a tenant has to undertake. Of course, this discussion also includes reviewing some of the lesser-known rights and obligations that can later become problematic for franchisees unaware of their implications.
We will then determine which terms are unfavorable and areas where to negotiate. Most leases are one-sided, favoring the landlord. We work through each provision of your lease, helping you understand which provisions should be revised to be fairer to you. From there, we help you prioritize which items are more important than others to accomplish your business goals. This gives us a roadmap for negotiating with your future landlord.
Once we have determined which provisions you want amended, we begin the negotiation process. We will negotiate and revise the terms of the lease such as the following:
- Exclusivity (preventing competitors from being in the same retail area)
- Use (what services and products you can provide to customers)
- Signage
- Tenant improvements
- Access
- Repairs
- Representations and warranties
- Guarantees
- Permit contingencies
- Force majeure (for example, acts of nature or more topically pandemics)
- Default provisions
- Assignment and sublease
- Termination
While any commercial real estate attorney can provide this level of review, franchisees have unique considerations; your franchise agreement or operations manual may have specific requirements regarding your place of business, its size, construction, or buildout. This is why you need a franchise attorney; we will review any franchise-related requirements for the lease and identify whether your lease fits both your needs as a franchisee of a given brand and the franchisor’s requirements.
Why Work With a Franchise Lease Negotiation Attorney?
While the relationship between you and your landlord may be cordial, it is important to recognize their interests may be adverse to yours. They have likely drafted the lease with the help of an attorney to protect their interests. And while you can attempt to negotiate your lease without an attorney, you can be sure they are reviewing any proposed amendments with their lawyer and are unlikely to surrender any advantage they may have.
As seasoned deal-makers, we help level the playing field by representing only your interests. We know what is fair and reasonable in your market, understand the law, and are tough negotiators. We work to make sure you get the best possible lease agreement so your business can flourish.
Flat-Fee Franchise Lease Review and Negotiation
We understand the importance of the bottom line, especially for franchisees. As a result, we strive to provide a value-added service to our clients without burdening their budgets. We provide the lease review and negotiation for a competitive flat fee. This review will include consultation and negotiation (including providing a redline modification). It also includes the time spent negotiating back and forth with the landlord or the landlord’s attorney or representatives.
Speak With a Franchise Lease Review Attorney
Your lease agreement can have a tremendous impact on the success of your business, so it is important that you get experienced legal counsel before signing. Invest in your future by working with an experienced California franchise lease attorney at Luther Lanard, PC. Whether you are in California, Florida, Pennsylvania, Texas or anywhere in the United States, to schedule an appointment for a lease review, contact us by phone or email today.