Please someone help me with this question ASAP?

I just purchased a shopping center. And one of our current tenant's lease contract from previous owner state that quote " Landlord agrees to restrict the remainder of the building against any restaurant that provides food for on-premise consumption". And he is "Franchisee). My question is that can I put another restaurant in one of our vacant space that sale food completely different from his restaurant in this building. Is there anything else that you would suggest to do about this problem. Thank you so much!
In Leasing Property - Asked by T D. - Feb 1, 2011
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Answer(s)

Joel R.
Owner/Investor
Bellevue, NE

It doesn't seem that you will be able to lease out space to any other business that serves food to eat "on site". Pizza take out only or something like it would possibly be an option. Contact an attorney and have them go over your contract with you for advice. Good luck, and congratulations on your investment.

Feb 1, 2011
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Isaac S.
Owner/Investor
West Hempstead, NY

I would say that from the language of the contract you maybe able to get out of your agreement. The law dictates that when the terms of a contract are "extreme terms" or "unreasonable terms" The contract is unenforceable. Please do not take my advice as I am only a Law Student. I do however have practical knowledge and would advise you to speak your attorney about my advice.
Regards,
Isaac J. Shteierman

Feb 1, 2011
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thurlow & company - U.
Broker/Agent
San Antonio, TX

Get thee to an attorney, PRONTO!
Business-wise, the more restaurants nearby result in increased business for all. This lease was probably agreed to by previous owner and tenant who were not aware of the advantage of more than one eatery.

Feb 2, 2011
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James S.
Broker/Agent
Lexington, SC

I would imagine parking is the issue. I just completed a deal where it had the same stipulation in the lease. They probably have an excellent location therefore do not need the "food court" mentality of more restaurants are better. Mostly I would bet they are concerned about the parking. Check with an attorney but also discuss with the tenant if they would be ok if you can work out the parking. In other words if they serve mostly dinner would a breakfast and lunch restaurant be ok. Hope this helps.

Feb 2, 2011
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Theodore B.
Broker/Agent
Houston, TX

I tend to agree with Byron T. in his response below. I would approach the tenant and discuss it with him/her first.

Feb 2, 2011
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Evan Keith L.
Broker/Agent
Rockville, MD

I'm basing my answer purely on the information that you've given, so don't take this as legal advice. There are a lot of other factors that could affect the situation, and more facts would be required to make that determination. That being said, exclusive use clauses are a very common provision in retail leases, and you generally cannot get out of them. Their very purpose is to provide a competitive advantage to the lessee...thereby inducing them to take space in your project. Most regional and national chains require them. Absent some exigencies that I am unaware of, your chances of getting around that clause are not great from a legal perspective.
As some others have said, though, you might just try having a conversation with the tenant. There may be different owners, now, and some restaurants are actually symbiotic with others.

Feb 4, 2011
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