Retail Lease Review: Protect Your Retail Business

Percentage rent clauses stating "Gross Sales shall include all revenue derived from sales made at or attributable to the Premises, including online orders fulfilled from the Premises" can include e-commerce revenue on which you pay 15–30% platform fees — meaning you owe percentage rent on sales revenue you never fully retained.

A retail lease with no co-tenancy clause in a shopping center anchored by one or two major retailers leaves you with no rent relief or exit right when anchors close. When an anchor departs, foot traffic drops 30–50% on average — yet you remain obligated at full rent for the balance of your term.

Exclusivity language reading "Landlord shall not lease to a direct competitor, except for tenants currently in occupancy or under lease" can be nearly worthless in an established center — if two similar stores already exist, the carve-out defeats the exclusivity entirely.

Provisions requiring tenants to contribute 1–2% of base rent to a landlord-controlled marketing fund, with language such as "Landlord shall determine all marketing expenditures in its sole discretion," create a mandatory cost with no transparency, no audit right, and no guarantee the funds are spent on activities that benefit your store.

Retail leases requiring stores to remain open "during all Center hours of operation" with lease default provisions for non-compliance can create technical defaults during staffing shortages, holiday closures, or early-hour operational decisions — giving landlords leverage to impose fees or declare breach.

An uncapped personal guarantee covering a 7-year retail lease at $8,000/month base rent represents $672,000 in personal exposure. Without a burn-down provision reducing the guarantee after years of on-time payment, or a good-guy clause terminating liability upon vacancy, this exposure remains constant throughout the entire term.