Follow Us

Law.com Subscribers SAVE 30%

Call 855-808-4530 or email GroupSales@alm.com to receive your discount on a new subscription.

Commercial Law Contracts Litigation

Challenges in Drafting a Restaurant Exclusive Use Clause

The reasonable and typical middle ground in the struggle between the parties regarding the scope of the "exclusive" is to protect only a tenant's "core" or "primary" business. Using such an approach, if properly drafted, will allow the tenant to avoid the two-coffee-shop situation, but will still permit the landlord to lease to multiple tenants with overlapping but not fundamentally competing uses.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

An exclusive use clause is one of the most important and heavily negotiated business issues in a shopping center lease, and therefore, it is usually negotiated by the principals or brokers in the letter of intent. In a typical shopping center lease, the tenant has committed to invest considerable sums to open its store, and expects to be able to recover such sums and earn additional profit based upon projections at that store. These projections are often built upon the anticipated demand for the tenant’s product in the particular location, and the location’s ability to support the demand.

Read These Next