Reading time: 3 minutes

From Lucky 7 to 7-Eleven to individually-owned convenience stores, the industry for the convenience stores is competitive. The industry is also subject to increasing competitive pressure from supermarket chains, fuel retailers, and takeaway food establishments. If you are thinking of joining a franchise convenience store network, or starting up your convenience store, it is important that you are aware of the legal considerations associated with entering into a commercial lease. Any commercial lease you enter into on behalf of your business will have a significant effect on its success well into the future as a sound commercial lease will provide you with the security to consolidate and grow your business. Conversely, without the security of a watertight commercial lease, you may find yourself facing expensive or unfair rent hikes. Therefore, before entering into a commercial lease, you should at lease be aware or the legal considerations surrounding the term of the lease, and any option for renewal of the lease.

Reviewing Rent Terms for Convenience Store Leases

Each commercial lease will be unique as your needs will be different from the previous lessee. Therefore, there is no magic number when it comes to choosing the term of a commercial lease, as it will rely entirely upon the negotiation process between you and the owner of the commercial property. Nevertheless, there are a number of legal considerations you should be aware of before entering into a commercial lease for your convenience store.

First and foremost you should be aware that the term of a commercial lease should be agreed. The term may vary from three to five years; however, does not mean that you cannot sign a lease that is substantially more in length than this term on behalf of your convenience store.

Another legal consideration relating to the term of a commercial lease is that you will want to be absolutely certain of the beginning and termination dates of the lease. Problems arise in this area due to the fact that some commercial leases can begin as the result of an event, such as the handing over of keys to the property, and terminate say, five years after that event. Therefore, if you sign this type of commercial lease it is imperative that your talk to the owner of the property and gain clarity in relation to when exactly the termination date will be.

Option to Renew Convenience Store Lease

An option to renew a commercial lease will allow you to extend the original lease beyond the initial termination date so long as it is exercised within a specified timeframe. Generally this timeframe is between 6-12 months before the original lease expires. However, one legal consideration that you should be aware of before signing a commercial lease for your convenience store, is that the option to renew can be included as part of the minimum lease timeframe, for example, five years. As such, you can sign a lease that lasts three years, with an option to renew for two years, and fall within the statutory framework. This will prove beneficial for new businesses or expanding your business as it will mean that you can shorten the length of the lease to minimise risk.

Key Takeaways

The location of convenience stores is an important success factor for stores. Convenience stores are often located in residential and metropolitan areas. Understanding the terms of your commercial lease will ensure your business is not forced to close for a leasing issue you were not aware of. A leasing lawyer can help you understand your commercial lease.

Webinars

Negative Online Reviews: What are the Legal Options?

Wednesday 22 September | 11:00 - 11:45am

Online
Negative or false online reviews of your business can be disheartening and damaging. Understand your legal rights and options with this free webinar.
Register Now

Australia’s Global Talent Visa: How to Attract Top Talent

Thursday 7 October | 11:00 - 11:45am

Online
Understand how to navigate Australia’s complex migration system to attract top overseas talent with our free webinar.
Register Now

5 Essential Contracts for your Online Business

Thursday 14 October | 11:00 - 11:45am

Online
Learn which key contracts will best protect your online business with our free webinar.
Register Now

Key Considerations When Buying a Business

Thursday 11 November | 11:00 - 11:45am

Online
Learn which questions to ask when buying a business to avoid legal and operational pitfalls, so you can hit the ground running. Join our free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer