Leasing space to a restaurant chain is very desirable for a shopping center landlord. Name recognition attracts people to the center and a chain typically has better financial resources. So, the landlord starts out saying “I want a Cheesecake Factory, Cooper’s Hawk, Tom & Chee…fill in the blank, at my center.” Then during lease negotiations, the tenant wants the landlord to pre-approve the tenant’s prototypical design and signage, to allow the tenant to modify its menu as the chain does, and to execute a franchise addendum required by the franchisor. And the landlord says no.
Huh? Is this not an oxymoron? The landlord wants the chain but doesn’t want it to be like the rest of the chain? I think the landlord should decide up front whether it wants the chain or it doesn’t.
If a landlord wants to do a lease with a franchise, the landlord has to recognize that the franchisor will require an addendum to protect its franchise. I am not even kidding when I say that more than one landlord has recently said it will not execute an addendum as an exhibit to the lease, but will consider putting the relevant provisions into the body of the lease. Having it as a stand- alone exhibit makes review significantly easier for the franchisor, especially if an issue arises several years later.
I honestly cannot understand the harm in that to the landlord. I will give a hot fudge sundae to anyone who can rationally explain how it changes the rights or obligations of the landlord in any way to include the franchisor clauses in an exhibit, as opposed to being included in the body of the lease.
I’d like to think the landlords are not simply trying to confuse the franchisor.