The restaurant lease - Part 1

In the first part of our series on restaurant leases, we explain which aspects are crucial for contractual partners, lease term, and lease payment – concise, legally sound, and practical.

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The lease agreement

1. Contracting party

Contracting parties in a restaurant lease agreement can be private individuals or legal entities (GbR, GmbH, etc.). The key point is: If the contract is with a private individual in a business context, it is not a consumer contract. This has legal implications, such as the exclusion of the right of withdrawal. Subleasing, for example, from a private individual to the operating company, can also be regulated here.

Generally speaking, a lease agreement is naturally a matter of trust. Do you trust the lessee not only to run the restaurant business successfully, but also to handle their financial transactions correctly?

 In general, it can be said that a lease agreement is of course a matter of trust. You trust the tenant not only to run the restaurant successfully, but also to handle his financial transactions correctly.

 

2. Contract object

In addition to the area that is being leased, which is best specified using a floor plan, it is also often about inventory that is included and is to be leased along with the property. It is very important here to list the (large) inventory precisely with its name and manufacturer. An inventory list should be created and then serves as an attachment to the lease agreement. Nowadays it is no longer common to also provide the small inventory (crockery, cutlery, etc.) and lease it along with the property. The effort involved in creating such an inventory list would also go beyond the scope of this article.

3. Lease period

The fixed-term fee is a core component. Whether fixed-term or open-ended, each option has specific advantages and disadvantages.

• Fixed-term contract: ends automatically without notice, providing planning security.

• Open-ended contract: offers flexibility, requires notice (e.g., every six months at the end of the lease year).

Furthermore, a minimum term or a waiver of notice can be agreed upon – useful for investments or valuable inventory.

 

4. Rent

The rent in a restaurant lease agreement is also freely negotiable. The rent amount is based on previous or expected revenue. (See separate article on this.) A tiered rent, especially for the first three years, helps restaurateurs get off to a good start. We advise against tying the rent solely to revenue for various reasons. The modus operandi is very complex and requires external service providers for auditing revenue. This incurs additional costs. Otherwise, transparency and thus the correct reporting of revenues cannot be guaranteed. This would undermine the relationship between landlord and tenant.

• Fixed rent: traditional, calculable.

• Graduated rent: gradual adjustment – often in the first few years.

• Turnover-based lease: flexible but complex.

  
  

We advise against this, as external auditing is necessary. Without clear traceability, mistrust arises – especially among banks and tenants.

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Structured overview:

• Contractual partner: Private individual or company – different regulations apply depending on the legal context.

• Term: Choose carefully – fixed-term vs. indefinite; waiver of termination or minimum term possible.

• Rent: Compare models – fixed rent, graduated rent, or turnover-based rent with risks and costs.

Factsheet Download:

Factsheet Restaurant Lease Part1.pdf

Download PDF • 95KB