Lease Negotiations for Franchisees

Your Franchise agreement may have language that will control the commercial leasing aspect of the business. In most agreements, the franchisor will have some level of control over the leased premise. Sometimes this is done by having the Franchisor being the lessee and then providing a sublease to the franchisee. This gives the Franchisor direct control over the premise. Another mechanism is to simply provide that any lease entered into by the Franchisee needs to have language that will give the franchisor an option to take over a lease if the franchisee is unable to satisfy the terms of the lease.  In this case, the landlord agree to not take any action for defaults under the lease terms, before giving notice to the franchisor and allowing them the ability to cure the franchisee’s deficiencies. If you have any query related to lease negotiation, talk to our franchise lease negotiation lawyers in New Jersey.

Finding commercial space, can be difficult to begin with. Now add in the fact that your Franchise agreement is asking for specific terms in the commercial lease agreement! Maybe you are thinking: Will I be in default because I can’t find space and a landlord that will work with my Franchisor’s terms? Finding a landlord amendable to those terms is an added layer but fear not, many franchisors are involved in the premises selection and the franchisor will often assist in the negotiations with the landlord to obtain the necessary leasing terms.

Steps to Prevent Franchise Lease Disputes & Issues

1. Try removing the time-frame requirement
2. Try extending the time-frame requirement
3. Negotiate franchisor lease requirements in the agreement

In some cases, the franchisor’s terms does not meet with the landlord terms. Then you can take below steps.

Firstly, the franchisee should try to negotiate with both the franchisor and the landlord. If successful, both the franchisor and landlord may agree to relax some requirements.

Secondly, if there is no chance of agreement, the franchisee should begin looking for a new location.

Thirdly, If a franchisee feels like they are unable to find a location within the time frame, they should ask the franchisor for an extension.

Riviere Advocacy Group has a network of franchise lease negotiation lawyers who can help you in this case. Contact us now and feel free to ask your queries.