Lease agreements in gastronomy
Restaurant lease agreement? Avoid mistakes and ensure success! Discover the most important clauses, tips on taking over inventory and information on termination.
The dream of having your own restaurant, café, or bar is a big step for many. Alongside a convincing concept, culinary passion, and entrepreneurial skill, a solid contract for the provision of commercial premises forms the backbone of any successful hospitality business. In the hospitality industry, this is typically referred to as a commercial lease agreement (Pachtvertrag), which regulates the use of the premises including inventory and often the right to continue an existing business. But what exactly does such a contract entail, what pitfalls lurk, and how does the termination of such a lease agreement work in the hospitality sector, for example?
What is the difference between a commercial lease and a rental agreement?
Especially in the hospitality sector, the distinction between a rental agreement and a commercial lease is fundamental. While a rental agreement primarily regulates the use of premises in exchange for payment, a commercial lease, specifically in gastronomy, goes a crucial step further. The lessee (Pächter) not only receives the right to use the premises, but also to claim the "fruits" generated from it – meaning the yield of the business. This often includes taking over inventory, such as kitchen equipment, furniture, and sometimes even the customer base or the "goodwill" of an established business. The legal basis for this is found in the Swiss Code of Obligations (CO). A clearly defined contract for a gastronomy lease is therefore essential to precisely define the rights and obligations of both parties – lessee and lessor.
Key elements of a solid commercial lease agreement
A well-drafted lease agreement for a hospitality property creates transparency and minimizes the risk of later disagreements. Pay particular attention to the following clauses:
Subject of the lease: A detailed description of the provided premises is essential. This includes not only the guest areas, but also the kitchen, storage room, sanitary facilities, and outdoor areas such as terraces. Equally important is a precise inventory list recording the condition of the inherited equipment and furniture. This prevents discrepancies upon return or in the event of contract termination.
Lease fee (Pachtzins): The lease fee can be structured as a fixed amount, revenue-based, or a combination of both. In the case of a revenue-based lease, the basis of calculation and the billing modalities should be clearly defined. Also, review regulations regarding ancillary costs and any adjustment clauses for the lease fee.
Lease duration and options: Many lease agreements in the hospitality sector are concluded for a fixed duration, such as 5 or 10 years. Often, option rights for an extension are granted. These provide the lessee with planning security.
Maintenance obligations: Who is responsible for which repairs and maintenance measures? Typically, the lessee bears the costs for ongoing maintenance and minor repairs, while the lessor covers major repairs and renovations. A clear demarcation in the contract is worth its weight in gold here.
Inventory: When taking over inventory, its condition must be precisely recorded. Who is liable for wear and tear and defects? Is there an obligation to renew certain devices after a certain period? These points should not be missing in a comprehensive lease agreement.
Operating obligation: Lessors often have an interest in ensuring that the venue is operated continuously (or depending on seasonality) to maintain its value and attractiveness. An operating obligation can therefore be part of the contract.
Non-compete clause: Sometimes a non-compete clause is agreed upon, which prohibits the lessee from operating a similar venue in the immediate vicinity. Pay attention to the spatial and temporal scope of such a clause.
Deposit: The amount and the conditions for the repayment of the lease deposit should be clearly regulated.
Termination of the lease agreement
Sooner or later, the time may come when a lease agreement is terminated. The modalities for this are subject to specific regulations that can differ from those for residential rental agreements.
Ordinary termination: In the case of open-ended lease agreements or upon expiry of a fixed contract duration, the relationship can be dissolved in compliance with the statutory or contractually agreed notice periods and dates. For commercial premises, the notice period is usually six months, unless otherwise contractually agreed. For commercial leases, these are often longer notice periods. The termination must be made in writing and reach the contractual partner on time. It is highly recommended to complete this step by registered mail to have proof of delivery.
Extraordinary termination: Premature dissolution of the lease agreement is only possible for important reasons. Such reasons can include, for example, the bankruptcy of the lessee, serious breaches of contract by one of the parties, or the unusability of the leased property due to unforeseen circumstances. Here, too, formal requirements and deadlines must be observed. In the event of default of payment by the lessee, the lessor can terminate the contract extraordinarily after setting a payment deadline with the threat of termination.
Protection against dismissal and extension: Similar to tenancy law, lessees of hospitality and commercial properties can, under certain circumstances, apply for an extension of the lease if termination would represent a hardship for them that is not justified by the interests of the lessor (Art. 272 et seq. CO by analogy). Such an application must be submitted to the competent conciliation authority in due time.
Providing a replacement tenant: If a lessee wishes to be released prematurely from a fixed-term contract for their hospitality property, they can propose an acceptable and solvent replacement lessee to the lessor, who is willing to take over the contract under the same conditions. If the lessor rejects such a replacement lessee without valid reason, the current lessee is released from their obligations.
The importance of professional advice
The drafting and reviewing of a lease agreement for hospitality businesses, as well as the handling of a termination, are complex matters with far-reaching financial and legal consequences. It is therefore highly advisable to seek legal advice from a lawyer specializing in lease and hospitality law or from an industry association before signing or in the event of a pending contract dissolution. These experts can evaluate individual risks, point out industry-specific particularities, and ensure that your interests are optimally protected.