Legal Issues for Restaurant Owners

Diners think that it must be exciting and fun to own a restaurant. You know the truth.

It’s a business with brutally long hours, high failure rates, ongoing staffing issues, and tough licensing and health regulations. We work with many of the most successful restaurateurs, franchise owners and food service organizations in MD, VA and DC to form, expand and protect their businesses. We can help you at every step. You can rely on our experience as you choose a location and negotiate a lease, acquire a liquor license, manage employees, respond to noise abatement issues, negotiate vendor contracts, comply with state and local health and safety requirements, or arrange financing with lending institutions or partners. With us as your behind-the-scenes support, you have more time and focus for dealing with the public aspects of managing your establishment. Please call us at (301) 251-1180 or submit an online inquiry so we can assist you.

Can I prevent the landlord of my new restaurant from leasing space to a direct competitor?

In large part, it will depend on whether you negotiated an exclusive use clause into your lease. That’s our standard policy. With that careful planning, your landlord may agree to prohibit others from selling similar menu items, or restrict leasing to specific types of restaurants. The good news: The landlord wants your business to succeed, especially if your lease includes a requirement that bases your rent on a percentage of gross sales.

Is it reasonable for my landlord to include percentage rent payments in my retail lease?

Landlords often request that you pay a percentage of your gross receipts, in addition to your basic rent payments. This is most typical in shopping centers or mall-type situations where the landlord establishes a mix of other uses. The reasoning is that a better mix of uses means more customer traffic, and the landlord looks to “partner” with you in the success they help create. When we review the lease terms, we can help you understand the calculation method for percentage rent and determine if the amount is reasonable. We can work with the lease language to make sure the periodic reporting requirements make sense for your business and to help define what should and should not be included in the definition of gross sales upon which you will be paying percentage rent.