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Q: shopping center lease agreement & legal aspects of exclusive rights -food items ( No Answer,   5 Comments )
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Subject: shopping center lease agreement & legal aspects of exclusive rights -food items
Category: Business and Money > Small Businesses
Asked by: wildzx-ga
List Price: $10.00
Posted: 29 Dec 2005 09:34 PST
Expires: 14 Mar 2006 19:13 PST
Question ID: 610920
I own a café, which serves Coffee/Smoothies/Hot & Cold Sandwiches and
on the lease it mention intention of use of the premises will be a
café including food items (on health permit/plan, business license
café is permit to have sandwiches and is in the health plan). On the
lease it does not mention I am not allowed to sell sandwiches.
Now a sandwich shop (well-known franchise) in the same shopping
complex is complaining to the landlord and is ready to take legal
because they have the right to sell sandwiches exclusively in the
plaza, which is mention on there lease agreement. The landlord did
call me and wanted me to downplay the sandwich sales and say that
sandwiches is not our main food item but also knows that we can sell
sandwiches and was saying the sandwich shop can sue me?
 
Anyway, what situation does this put me in? What action should I be
prepared to take? Do I need to consult any lawyer on this case? Any
advice you can offer?

Our concern is to get this puzzle solved now with legally because if
we need to sell or landlord sells or if the sandwich shop sells, same
dilemma can arise any time due to our lease agreement, which is very
broad?
Answer  
There is no answer at this time.

Comments  
Subject: Re: shopping center lease agreement & legal aspects of exclusive rights -food i
From: myoarin-ga on 29 Dec 2005 10:32 PST
 
This is just a free comment and not an "answer" to your question, and
it is also clearly not legal or professional advice, as you can read
in the disclaimer below.

That said, I believe that you do need a lawyer and one with experience
on the matter since you are up against a franchise outfit with
experience, no doubt with lawyers experienced in pursuing such cases. 
The situation in your state or community may be different from
elsewhere, based on that reference to the "health permit ...".  The
reaction of the landlord could suggest that he has recognized that he
made a mistake by giving the franchisee a lease contract allowing him
the exclusive right to sell sandwiches, perhaps recognizing with
hindsight that your contract as a cafe with the right to sell food
items - namely also sandwiches - was also binding.
IF this is so  - something your lawyer should clarify -  the landlord
is in a bind, i.e., it is not just a problem between you and the
franchisee.  That would not be good for him, but still not necessarily
protection for your cafe; the franchisee, and presumably the
franchiser's lawyers, aren't going to back down, they will put
pressure on the landlord to stop your selling sandwiches  - as they
may have already, and may even offer to help him buy you out of your
lease, if they have to admit that they can't win their case  - but
they may screw that threat up as high as possible in the hope of
scaring you off.

That is a lot of "ifs", and I have painted a picture of what just could happen.
The point is that you need a good lawyer,    or maybe you should shift
to selling "poor boys" or "submarines" or whatever the alternative is,
if they are not legally defined as "sandwiches", something a lawyer
should also be able to clarify.

Again, this is just one man's opinion.  I hope it helps a bit, but
maybe a Researcher can give you a stronger defense.  I hope so.
Good luck, Myoarin
Subject: Re: shopping center lease agreement & legal aspects of exclusive rights -food items
From: nelson-ga on 29 Dec 2005 10:38 PST
 
If you have not made any agreement that you will not sell sandwiches,
then it is the mall owner who can be sued for breach of contract, not
you.  You have no agreement with the sandwich shop, and you agreement
with the mall does not prohibit sandwiches.  The mall is clearly
negligent here.
Subject: Re: shopping center lease agreement & legal aspects of exclusive rights -food i
From: wildzx-ga on 03 Jan 2006 11:46 PST
 
Thank you for your comments, just to clarify the sandwich shop was in
shopping center existed before us. On our health plan, it does have
sandwich prep area designed to make sandwiches. We have just stepped
in plaza about one year ago and did good amount of investment,
including construction,  in our cafe. For the protection of our
business in the future, are we able to take legal action against the
landlord, as well. (the landlord may just work out a deal with current
sandwich owner without getting franchise lawyers and we could end up
in the same situation later with change of ownerships of landlord,
sandwich shop or when/if we want to sell the cafe)
Subject: Re: shopping center lease agreement & legal aspects of exclusive rights -food i
From: myoarin-ga on 04 Jan 2006 09:26 PST
 
I misunderstood, thought the franchisee was a later lease.
If you think the landlord can find an agreement with the franchisee, I
think (no legal advice!) that if this is made part of the lease
contract, a change of ownership by either would not change the lease
and that agreement.
But a new franchisee might could suggest a new lease for other logical
reasons, and that agreement be "forgotten" in the new lease.  But you
could also have that agreement documented to your lease  - or an
explicit recognition of your right to sell sandwiches.
A lawyer should be able to tell you.  

What about advertising "bread 'n' spread" instead of sandwiches?

Good luck, Myoarin
Subject: Re: shopping center lease agreement & legal aspects of exclusive rights -food i
From: wildzx-ga on 04 Jan 2006 11:41 PST
 
Thank you. changing the sandwich name is option but we are not
violating any lease terms, correct? and we should not have to do
this... And i am not sure if changing the name is going to get
everything resolved..either..(on sandwich shop lease it says "
exclusive right in the shopping center to engage in sale of
delicatessen and sub-marine type sandwiches.....") We also want to be
able adversities sandwich name  since it is part of our business. I am
not sure what the landlord stand is at this point.
Sorry for keeping this discussion long but it has provided me with wealthy info..

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