Lease Negotiation

Finding the right location for your new store is literally the most fundamental action that will spell the success or failure of your franchise.

Once your agent has found the right location and discussed with your planning consultant whether it either has the right planning permission or is likely to be successful in an application for change of use, then your agent will agree the basic terms of your lease in a document called “Heads of Terms”.

This document is not legally binding but sets out the bare bones of the agreement you have with the landlord. These agreed Heads of Terms are then circulated to the solicitors so that they can document the agreed terms into a lease.

Lease negotiations are probably a new area for many franchisees and they are often unclear on what is actually taking place. Fraser Brown has unparalleled expertise in lease negotiation. We have successfully negotiated over 700 leases for similar franchise businesses and that expertise is vital not only in agreeing the lease quickly and easily but also during the term of the lease. 

A badly drafted lease may not be apparent until the end of the lease term or possibly when you wish to sell your business. The investment in sound advice from experienced solicitors at the outset will help protect your position in the future.

We will work closely, not only with your agent, but also with your planning consultant. We will not allow you to enter into a lease, and therefore commit yourself to a legal obligation, until planning is in place. If you are tied in too early and then

your planning application is rejected or granted with conditions that stop you operating at a profit, the lease will still be binding. 

This could mean that you have a shop which, at worst, you can’t use and at best you can only use at a loss. We will negotiate a binding contract with the landlord such that they are obliged to grant you your lease but only when planning consent has been granted for the unit that is acceptable to you.

The other major advantage of the contract is that when planning is in place the location will be much more attractive to other tenants and therefore the landlord.

An unscrupulous landlord could therefore try to charge you more rent than you originally agreed unless there is a binding contract in place on the terms you previously agreed. We will search the records of the Local Authority, Water Authority and others to find out what they can about the property. It is essential that you do this as the search results can reveal things such as whether there are plans for road widening nearby which might mean the shop is up for compulsory purchase. 

Comprehensive enquiries will be raised with the landlord. In English law it is very much up to the tenant or buyer to investigate the property rather than for the landlord to volunteer information. 

The expression “buyer beware” applies. These enquires should flush out any information the landlord has about the property which may be relevant to you. You should of course always have a survey carried out on  the property as physical damage will not be revealed during the legal process. Your agent can advise you on organising a survey. 

The lease is a binding document that will govern your relationship with your landlord for many years to come. We will ensure that this is worded to be fair on you and not just worded in the landlord’s favour. Clauses that look simple, such as your options to break the lease or for the review of the rent, will only become apparent if they are badly worded after the lease is granted. The wording, if badly drafted, might mean that you can’t sell your business.

You will, right from the outset of your lease, be spending a lot of money on fitting out the shop. The scope of the fit out needs to be carefully agreed with the landlord and their consent documented in a licence to alter. Again as with the lease, the licence needs to be considered very carefully. For example if you are spending many tens of thousands of pounds in improving a shop you must ensure that the licence makes it clear that the landlord can’t charge you more rent during the lease just because of all the money you have spent on improving the unit. 

Many people know from previous dealings with legal matters that keeping informed of how matters are progressing can be frustrating. We have a dedicated case tracking website available so that you can check the progress of your matter at any time day or night. This helps us keep our clients informed at all times and leaves us free to speak to you whenever you need to pick up the phone. 

When the documents are agreed you will receive a detailed lease report in language that you can understand summarising the content of your lease. This will extend to about 6 or 7 pages and will point out to you all of the key points so you are aware of them before you sign rather than after.

 

 

 

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