Your Hours May Be Set by Your Landlord: The Continuous Operation Clause in Restaurant Leases

RESTAURANT LEASING:

PART 4 OF 5

Most landlords will insist on including a continuous operation clause in a restaurant lease. These clauses require a tenant to be open for business continuously during the term of the lease on specific days and at hours dictated by the landlord. It is in the landlord’s best interest to make sure it’s tenants are fully operating because this attracts customers. More customers increase a tenant’s sales, which in the case of a lease with percentage rent, means more rent owed to the landlord. While these clauses vary considerably from one lease to another, it is important to read and understand them before you enter into a long-term agreement as continuous operation clauses have several hidden problems that could affect the unsophisticated restaurant tenant.

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