A properly negotiated lease is critical to protecting your franchised business as well as the franchise network and brand. For franchisors, entering into a commercial lease agreement is an important step as the location out of which a business operates is critical to its success. Indeed, the adage “location, location, location” is much more than a cliché: Your business should be in a prime spot with heavy traffic and other quality (non-competing!) businesses nearby that attract patrons. Aside from location, there are other issues inherent in leasing, most notably, securing a lease that protects your ownership interest in your franchised business.
Franchisors often encounter these scenarios: changes in your business model, competition from nearby competitors, struggling franchisees, and a need to assign the lease to a new party. Here are a few key considerations in negotiating and executing a lease agreement that will help you address these situations.
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