Lease Renewal Do’s & Don’ts for Restaurant Tenants

By Dale Willerton, The Lease Coach –

Approximately two million commercial lease renewal transactions take place every year in North America. Negotiating a lease renewal is not an overnight process. It can take some time and involves a number of steps (as found in our book, Negotiating Commercial Leases & Renewals FOR DUMMIES, and as summarized below):

Do start the lease renewal planning process well in-advance. Beginning 12 – 15 months in advance allows ample time for negotiating, completing paperwork, searching for alternate sites (if necessary) and accounting for Murphy’s Law.

Do create competition for your tenancy. Restaurant tenants should negotiate on multiple locations simultaneously – especially with lease renewals, even if they don’t want to move. Create options and play one landlord against another.

Do talk to other tenants. For lease renewals The Lease Coach often talks with other tenants at the property who have recently renewed leases, asking how these renegotiations went and what the landlord was willing to agree to in terms of rental rates and further tenant incentives.

Do negotiate for lease renewal incentives. Restaurant tenants often neglect or are simply fearful of negotiating for lease renewal incentives. Ask yourself what inducements (e.g. free rent/tenant allowances) would the landlord give to a new tenant coming into the property?

Don’t accept an inappropriate lease length. When renewing, a tenant should not automatically sign for the same terms as the initial lease without considering their own future. The business may be sold and/or a restaurateur may retire. Don’t get locked into a long-term lease renewal if a shorter term is desired.

Don’t settle for the same rental payment. Achieving a rent reduction on a lease renewal is a very real possibility and something The Lease Coach specializes in for clients. If the landlord is leasing space to new tenants at less than what the tenant is currently paying, a rent reduction could be achievable.

Don’t allow the landlord to retain the deposit. If the tenant has paid the landlord a deposit, they should ask for this back upon the lease renewal date. If the tenant has faithfully paid rent over the initial term, then why should the landlord keep this money?

Don’t unnecessarily exercise your option. This may prevent you from getting a rent reduction or other incentives.  Alternatively (if the landlord wants you to stay anyway) The Lease Coach simply negotiates a Lease Extension and Amending Agreement in your favor.

Dale Willerton is The Lease Coach. A professional lease consultant, Dale is the author of Negotiating Commercial Leases & Renewals FOR DUMMIES and frequently speaks at industry events such as the Florida Restaurant & Lodging Show where you can see him again this year. Visit to request your complimentary copy of Dale’s book.