Commercial Property Solicitor: Free Consultation

Restaurant Leases – Tips for Tenants

You’ve found an ideal property in which to set up your restaurant and you can almost smell the aroma of your business’ success. You can’t wait to get started. The last thing you probably feel like doing is wading through the legal issues. Unfortunately, this is a necessary evil. Get your lease terms right and you will reap the benefits.

Like most people who open a new restaurant, you’ve probably decided that you will be renting the property (at least to start with) as you probably don’t want to waste valuable cash on buying the freehold. So, the first thing you’ll probably need to do is negotiate the main lease terms. Landlords and agents call these terms the ‘Heads of Terms’. They’re not binding, but they do set out the structure of the deal, so it’s well worth spending the time getting the heads of terms right.

Here are some important points that you should consider including in the heads of terms:

Recent Customer Review (30 October 2023): 'James was excellent. Thorough, helpful and very professional throughout. Fees were made clear from the beginning and no hidden extras.'  Read more >

  • Rent Free Periods
  • Works
  • Sit Out Licence
  • Repairs
  • Right to Break
  • Permitted Hours
It can be very expensive fitting out a property to use as a restaurant. Architects may be needed to come up with a trendy layout and feel, and quality kitchen equipment doesn’t grow on trees. You probably won’t be receiving much income whilst you’re fitting out the place and during those early days when you’re waiting for the public to learn about your great new restaurant. Rent free periods can really help you out at this difficult time and you should encourage your landlord to work with you to make the business a success, so you can both benefit in the long term (read about negotiating a rent free period).
Restaurants often require special works to be carried out to the premises. For example, restaurant kitchens tend to generate a lot of smoke, so special flues and extraction equipment may need to be fitted that affect other parts of the landlord’s building. Tenants need permission to carry out work. Not only will you need to be careful to make sure that all planning consents are obtained but you need to ensure that the landlord is 100% happy with your proposals to have special pipes/flues/equipment running through other parts of his building. Make sure he is aware from the start of just what works you intend to do.
If you intend to put seating for customers outside, make sure early on that the landlord will allow this and, if so, on what terms. Keep in mind also, that you may need a licence from the Council to put tables and chairs for your restaurant in the street (usually called a ‘sit out licence’).
Tenants of restaurants tend to take a lease of part of a building only (e.g. the basement or ground floor only). If so, you need to make sure that the Landlord agrees to keep the rest of the building, especially the structure, exterior parts and roof, in good repair. So, if the roof collapses, you don’t want the landlord shrugging his shoulders and saying it’s not his responsibility. You should also try to make sure that the landlord is not entitled to recoup the cost of such repairs from you (often called a ‘service charge’). If you must pay towards these costs make sure you only agree to pay a fair proportion and that a maximum figure is agreed for which the landlord can charge you during any one year of the lease.
It’s good to have an escape plan in case your restaurant does not take off. You should therefore always try to agree to a right to break the lease early on in the term (for example on the 2nd or 3rd anniversary). That way, you know that you won’t have to find a way of keeping up with rental payments until the end of the lease for a Property you would rather be without.
Make it clear that you are allowed to trade 24/7 (subject to planning restrictions and other applicable laws). This might not be so easy if your restaurant is in a shopping centre where opening hours are strictly regimented. Still, if the issue is discussed openly, a happy medium can often be agreed.

There are, of course, many other issues to think about when agreeing the terms of your restaurant lease. That said, the above should be good food for thought before you start your negotiations. If you can squeeze some of them into your lease, it could help you massively in the long run...

Why Choose Bartletts Solicitors?

Solid Traditional Values Delivered
in a Modern Convenient Manner


Our firm has years of experience in commercial property matters across England and Wales.

Benefit from competitive fixed fees, a free no obligation quotation and no hidden costs.

Our solicitors are very experienced having worked at the firm for an average of 18 years.

Bartletts Solicitors was managed by John Bartlett for over 40 years, the last 25 of which he was assisted by Trevor Morris. Trevor is now the managing director, representing continuity for the firm’s traditional values and customer satisfaction ethos.

Send Our Commercial Property Law Team an Enquiry:
(or give us a call on 0151 227 3391)

Commercial Property Solicitors:

Commercial Property Solicitor
James Edwards is a commercial property solicitor advising landlords and tenants on commercial leases. He also has experience in buying and selling businesses. James and his team will be happy to offer you a free no obligation quotation.

Commercial Lease Information:


We also have dedicated pages covering the following lease types:

Warehouses, Industrial Units, Dark Kitchens, Offices, Hair Salons, Clothes Shops, Restaurants, Surgeries, E-Cig Shops.


Trustpilot

Related Trustpilot Reviews:


Bartletts is proud to support a number of public bodies and charities, including Liverpool Cathedral, National Museums Liverpool, the Walker Art Gallery and Zoë’s Place Baby Hospice. You can find out more on our blog or on social media.

“I was delighted Bartletts Solicitors continued their tradition of philanthropy with Liverpool Cathedral this year. Thank you so much for your generous gift.” - The Dean of Liverpool, The Very Revd Dr. Sue Jones (Dec 2020)