It has happened in the past that cafe owners get so busy running a cafe that they miss important deadlines relating to their leases. Don't let this happen to you! If you miss the deadline to renew your contract of your lease, the landlord of the property has every right to refuse to renew, leaving you without a building for your cafe!
When running a cafe, it's important to focus on the day-to-day, but don't get so caught up in it that you miss important deadlines such as lease renewals!
Not only is punctuality an issue, but also make sure that you fully understand the terms of your lease before signing or agreeing to anything. There are a few items that are a part of every lease agreement:
The Market Reviews
A market review can make you pay more for your lease than you had originally anticipated. Make sure not to agree to anything until you know what the market review looks like, otherwise you could end up paying a higher rate for rent based on this information. It's important to note that market reviews almost always go up in price, and rarely ever down.
You can negotiate the lease for your cafe up front or wait until you have all the information on the market review before agreeing to sign a lease.
There are a few common clauses that are included in yearly reviews, which is a measure by which the landlord determines the value of the property.
Your yearly review can include things like CPI annual increases, a fixed yearly increase (usually between about three and five percent), or a four to five percent rental increase. This last clause is not a good sign, as over the years your rent will keep increasing until you are paying way too much!
Your lease will also include options to review. This will help you to figure out if your space is still worth renting.
If you can, you should sign a lease for the longest amount of time possible, so that you will be sure to have the rights to occupy the same building for your cafe.
Most leases require a review three months before the end of the current lease. So don't take your time -- look over your options right away, and submit your option, in writing, to your landlord.
The ideal minimum for leasing should be eight or nine years, for the complete term.
Finally, if you have plans to sell your cafe at some point, make sure that you keep this in mind while looking over your lease documents. Running a cafe can be profitable, but you will find few buyers if the lease is almost at an end. Buyers will want a minimum of eight to nine years left on the lease, so that they have plenty of time to get set up before the lease expires and they have to renegotiate.
Take the time to look over your lease documents, talk to your landlord, and submit your options in writing. This will ensure that your cafe will stay successful, while protecting your legal interests.