I Run a Food Business. What Should I Look Out for in a Lease?

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Table of Contents

• Common Leases Clauses
• Specific Food Related Clauses
• Key Takeaways

Running a food business comes with a set of specific legal requirements. Some of these requirements will be set out in your lease, which is the document that sets out how you may use the property you are renting. Regardless of whether your food business is a café, bar or restaurant, there may be several common clauses in your lease that affect your business significantly.  This article will outline some:

• industry-specific clauses that may be in your lease; and
• common obligations you may face as a tenant.

Common Leases Clauses

Some common lease clauses which could affect the way you run your food business are set out below. Although not all of these clauses will appear in every lease, it is important to consider any possible implications for your business and whether you should try to negotiate better terms.

Requirement to Obtain all Licenses

As a tenant, your obligations will usually include obtaining all required licences and approvals for your permitted use. To run a food business, you may require certain food safety licences or approvals before you are able to trade. If you run a restaurant or a bar which serves alcohol, you will also need to obtain a liquor licence. Before signing the lease, you should make inquiries with the local council or the relevant authority to ensure that you will be able to obtain these licences and to understand the costs and requirements involved in obtaining them. 

Obligation to Trade

Under your lease, you may need to trade for certain hours and days in a week.

This may be an issue for you if you do not wish to open for trade during that entire period.

You should ensure that the lease does not require you to trade for periods of time that you do not intend to be open for. It is important to: 

• discuss this with the landlord before signing the lease; and 
• ensure that the lease states the correct trading hours.  

Restrictions on Noise

Under the lease, you may be prohibited from disturbing neighbouring businesses or the landlord.

Many food businesses, especially bars and restaurants, play music in the venue. If you plan to do so, you should discuss this with your landlord and ensure that the lease permits you to play music at the premises.

Prohibitions on Dangerous Substances

You might find that your lease also prohibits you from using dangerous or inflammable substances. If you may need to use certain inflammable substances in the cooking and presentation of food or drinks, make sure that you discuss this possibility with the landlord and make appropriate changes to the lease.

Specific Food Related Clauses

Many leases will also include additional food-related obligations and requirements. Some common clauses included in leases for a food business are set out below.

Compliance with Food Regulation Clauses

The landlord may include a requirement that the food you serve must:

• comply with food regulations and authorities; and 
• be of a certain quality. 

You should review all relevant food regulations to ensure that you can meet these requirements.

Inclusion of Menus

Many leases for food businesses will require you to include a menu. Once approved by the landlord, this menu will be attached to the lease. It may also be referred to in the permitted use.

Including a menu in the permitted use is particularly common for:

• cafes which are operating in an office building (where most of the customers are office staff); or
• small food outlets operating in a shopping centre food court (where the landlord wants to ensure there is a diverse option of food choices available). 

If the menu is tied to the permitted use, you will likely find it difficult to change it in the future. If this is the case, you should include a special condition which allows you to change your menu with no, or limited, involvement from the landlord. 

Other Requirements

There are several other clauses which may be included in your lease for a food business. 

It is important to review your lease thoroughly to ensure that you do not miss any of these specific requirements.

Key Takeaways

If you run a food business, you should be aware of common clauses and specific food-related clauses that may appear in your lease. It is important that you understand how these clauses will affect your business and ensure that you make any necessary changes prior to signing the lease. If you run a food business and require assistance in reviewing your lease, please contact LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.