the Restaurant lease agreement part 2

The second part explains how value protection via the consumer price index works, what deposit amounts are usual, when redemption makes sense and why the business purpose should be precisely regulated.

5. Value protection

A solid leasehold clause is essential – especially for long-term leases. It ensures that the lease rate is automatically adjusted for inflation or deflation by reference to the Consumer Price Index (CPI) on a specific date. This protects both parties from unexpected economic fluctuations.

6. Deposit

As a rule of thumb, the deposit should be no more than six times the monthly rent – typically three months' net rent. A higher multiplier is only justified if particularly valuable furnishings are being handed over and no purchase price is being paid. Please note: There is no legal requirement to invest the deposit in an interest-bearing account – transparent provisions in the contract nevertheless build trust.

The Restaurant Lease Contract - Part 2

7. Transfer fee

Compensation payments are common in the restaurant industry – often as part of a change of tenant. The realistic amount must be calculated in line with the market.

Banks rarely finance compensation payments for restaurant leases, which significantly reduces the number of potential tenants.

Disclosure requirements: Goodwill (e.g., through business analyses, profit and loss accounts) and inventory (with original invoices) should be available.

Important: The compensation value must not exceed the book value in the fixed asset account.

For brokers, the prospects of securing a lease decrease with excessive compensation amounts – the ability of suitable prospective tenants to pay is what counts.

8. Purpose of the business

The lease agreement must clearly define the permitted use. For example, if a restaurant is converted into a shisha bar, precise usage restrictions must be included in the lease. This avoids conflicts and ensures long-term clarity.

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 Summary:

• Value protection: Automatic adjustment of the rent based on the consumer price index.

• Security deposit: Recommended: 3x monthly net lease; max. 6x for high-value inventory.

• Compensation payment: Must be transparent, market-based, and documented, without exceeding the book value.

• Business purpose: Define precisely the permitted use of the property in the contract.

Download Factsheet:

Factsheet Restaurant Lease Part2.pdf

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