For most restaurant owners, the lease is the single most important contract they will ever sign. A great location can fuel success—but a poorly negotiated lease can drain profits, restrict flexibility, and even put your business at risk.
After more than four decades of negotiating restaurant leases, here are the three most common pitfalls I see, and how you can avoid them:
1. Hidden Costs in the Lease
It’s not just about rent. Many landlords pass on additional costs—such as maintenance fees, taxes, or insurance—that can significantly increase your monthly obligations. Always review these provisions carefully and negotiate caps where possible.
2. Restrictive Use Clauses
Restaurants thrive when they can adapt, but restrictive clauses can limit menu changes, event programming, or even your ability to serve alcohol. Ensuring flexibility in the lease protects your long-term growth.
3. Lack of Exit Options
A lease should work for you—not trap you. Without negotiated rights for early termination, subleasing, or assignment, you may find yourself stuck in a location that no longer serves your business needs.
The Takeaway
Every lease negotiation is unique, but the principles are the same: protect your margins, preserve your flexibility, and plan for the future.
By addressing these issues up front, you position your restaurant for long-term success. If you’d like an experienced legal partner to review or negotiate your next lease, I’d be glad to help.