Lease terms that quietly decide your margin

Base rent is the number everyone fights over. It is rarely the number that kills the business. The clauses buried further in the lease — common area maintenance, percentage rent triggers, exclusivity restrictions and assignment rights — are where operators lose money they never see coming.

Common area maintenance charges can add twenty to forty percent on top of base rent, and they are often not capped. Negotiate a cap on CAM increases, or at minimum a right to audit the landlord's CAM calculation. Percentage rent kicks in above a sales threshold and can turn a great year into a mediocre one; understand where the breakpoint sits relative to your realistic revenue.

Exclusivity works both ways. You want the landlord to guarantee that no direct competitor opens in the same centre, but you also want the right to assign the lease if you sell the business. Without assignment rights, a profitable venue is worth less to a buyer because they cannot assume the location.

Before signing, have someone who has opened and closed venues read the lease. The fifteen hundred dollars for a review is cheaper than discovering in year three that your CAM doubled or that you cannot transfer the lease when you sell.