Common Lease Mistakes

Top 5 Mistakes Restaurants Make in Lease Negotiations

A bad lease is one of the biggest reasons restaurants fail. Before you sign, make sure you’re not locking yourself into an agreement that will strangle your business.

Mistake 1: Agreeing to a Personal Guarantee Without Limits
Many landlords demand that owners personally guarantee rent obligations. Without a cap or limit, your personal assets may be exposed indefinitely.

Mistake 2: Overlooking Use Restrictions
Some leases prohibit changes in menu, service style, or hours without landlord approval. This can stifle your ability to pivot or expand.

Mistake 3: Not Clarifying Repair & Maintenance Responsibilities
Ambiguous lease language often leaves tenants stuck with costly repairs they didn’t anticipate. Spell out exactly who handles HVAC, plumbing, and structural repairs.

Mistake 4: Missing Termination or Relocation Clauses
Without proper exit options, you may be trapped in a failing location. Negotiate for reasonable termination rights.

Mistake 5: Ignoring Renewal Options and Rent Escalations
Future rent increases can make a profitable business unsustainable. Pay close attention to escalation clauses and renewal rights.
 
We negotiate leases with one goal in mind: protecting your dream. Contact Thompson Hospitality Law to review your lease before you sign.