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After about four days, we received a reply from the leasing agent reporting the landlord’s response to our requested changes in the lease. Of the eighteen changes we had requested, we were down to about three major issues.

The first roadblock is a lease the landlord had granted to their anchor restaurant tenant that barred any new restaurants. While they were allowing our operation because they are a dinner only seafood house and we are breakfast and lunch only, there is a problem. If the anchor tenant changes their business model to include lunch, we would be competing with a 250 seat operation of a major chain. We want the right to terminate our lease. The landlord isn’t willing to go along with this; at this point anyway.

The second deal killer is the exterior of the existing structure. It is dirty, needs painting and a few stucco repairs. Essentially, the landlord’s reply is that he is not spending any more money to get us in the space. Of course, we aren’t going to spend more than we have to either.

The third issue is the size of a grease trap. They want a 750 gallon minimum and feel they have the right to dictate this, since they are paying $55,000 of the construction costs. We only want to put in the minimum the code requires.

Our reply to these three items was quick (same day):

1. <!–[if !supportLists]–><!–[endif]–>We cannot sign a lease knowing we are about to spend $250,000 and more to build a business with the possibility that a major corporation could change their business model and put us in a very difficult position. The risk isn’t worth it.
2. <!–[if !supportLists]–>The exterior is the landlord’s responsibility, now and in the future. We are not asking for anything that isn’t already required in the lease. We asked why we would want to spend this kind of money to bring people to a dingy, run-down entrance. We don’t want to start a relationship that is confrontational, but it IS already in the lease!
3. <!–[if !supportLists]–>We can agree to the 750 gallon grease trap IF the landlord is willing to pay for additional costs that may be required due to the size they are demanding if other utilities have to be moved.

The first two issues are real and we cannot move forward without an agreement. The third issue is a negotiating item that we can back off of if necessary; again, to give the landlord some feeling of fairness and control.

The balance of the lease can be modified to meet both parties’ goals.

We will see what happens. We responded on the eve of the 4^th of July. We will not anticipate a response until the next week.

The first draft of the lease sent to me was typical of any commercial lease. It was a one-sided document favoring the landlord that no tenant would sign; even with the assurance of the leasing agent it was “standard” and used for properties all across the country. There is no such thing as a standard lease. If you want more on this subject visit here on examples of clauses that can put you out of business.

I reviewed the first draft along with my legal counsel and together we came up with about eighteen necessary changes. The attorney’s letter was sent to the leasing agent to be forwarded to the strip center owner. The good news was that apparently they were not involving legal counsel on their end; at least not yet.

Some of our requested changes, we anticipate being rejected. This is part of negotiating; asking for things you know you aren’t going to get. This allows the other party to maintain a form of control and not feeling like they are giving away too much.