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Retail Hours of Operation: A Tenant's Perspective

In a retail setting, especially in situations where the landlord is receiving a percentage of the gross sales earned by the tenant, landlords will attempt to establish minimum (and maximum) hours of operation for the tenant. Also, the landlords quite often reserve the right to modify these hours of operation upon providing notice to the tenant. This requirement that the tenant be obligated to be open for business for certain specified hours may have far-reaching effects on the net income of the tenant derived from its business operation.

17 minute readJuly 30, 2008 at 12:54 PM
By
Glenn A. Browne
Retail Hours of Operation: A Tenant's Perspective

In a retail setting, especially in situations where the landlord is receiving a percentage of the gross sales earned by the tenant, landlords will attempt to establish minimum (and maximum) hours of operation for the tenant. Also, the landlords quite often reserve the right to modify these hours of operation upon providing notice to the tenant. This requirement that the tenant be obligated to be open for business for certain specified hours may have far-reaching effects on the net income of the tenant derived from its business operation. Further, the tenant may desire to have the right to 'go dark' or not operate during certain times or days during the year. As a result, a tenant should consider carefully what impact the hours of operation provision in the lease has, the various remedies that are available to the landlord for the tenant's failure to operate during those required hours of operation, and the need for the tenant to establish in the lease certain times and certain days during the year when it is not obligated to be open for business.

Hours of Operation Requirement

As landlords attempt to maximize the amount of percentage rent generated at retail locations, they have increasingly sought to maximize the total number of hours that the tenant is obligated to operate at the retail facility.

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