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Leases are a critical part of a business's success or failure, but most franchise owners are woefully underinformed about negotiating one that best meets their circumstances while avoiding some common pitfalls.
The Center for Commercial Real Estate provides some welcome guidance on their site, which includes an overview of the leasing process.
It is mind boggling how often landlords and tenants find themselves looking for guidance because an unpleasant surprise has cropped up during the course of a lease. In most every case, such surprises are the result of having signed a poorly understood or poorly constructed lease agreement.
This is especially true of smaller, less sophisticated tenants who, for whatever reason, have chosen to sign the landlord's "Standard Form Lease" with few, if any, changes. By the same token, inexperienced Landlords will often embrace the use of a lease agreement without really understanding the terms and conditions the agreement will impose on them.
Further on, we read:
The potential for adversity can result from many things but the focus of lease negotiations is typically limited to the issues of base rent and concessions. A host of other important concerns remain that are often overlooked, misunderstood or under-negotiated, even by sophisticated landlords, tenants and their real estate representatives.