October 2014Newsletter

Special Lease Considerations for Restaurant Uses

Agribusiness, Food & Beverage Newsletter

Our Agribusiness, Food and Beverage Group serves clients in many sectors of the Ag, Food and Beverage industry, or as we say, from “field to fork.” Today I am focusing more on the “fork” side of the business.

We often help clients negotiate leases, and we represent them when problems arise in those leases. Restaurants have particular needs that must be addressed in their leases, or unintended consequences can result. Unlike a standard office lease—where employees come and go once a day, deliveries are minimal, and waste is mostly paper—restaurants must have parking available at crucial mealtimes, places for foodservice trucks to deliver, and dumpster areas for food waste and grease. Balancing the leases in a building or center that shares a number of uses can be difficult, especially if parking is tight. A medical tenant may have one patient waiting for every patient being seen; a coffee place may have many brief visits with a lot of customers backing into traffic lanes; an exercise location may have large groups of people coming for class times all at once.

It is important to think through the particular needs of the restaurant tenant and to plan ahead to insert terms into the lease that will protect the restaurant no matter what other users come to the center. Inserting terms that require employees of any tenant of the center to park in designated areas well away from the building can be helpful. Posting signs prohibiting parking for certain tenants, or reserving parking for certain tenants at stated times of the day can be helpful.  Contractually restricting the landlord from signing leases for other parts of the building, for parking-intensive uses, can be helpful. Ultimately, however, it may not be possible to imagine every possible occurrence that will hinder the restaurant’s operations. In those cases, having terms in the lease that require at least a stated number of parking spaces or have general limitations on other tenants’ use of the parking spaces may offer the flexibility needed to react to facts as they arise, and to assure the restaurant tenant receives the benefit of the bargain they struck.

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