One of the types of provisions that you might negotiate to include in your commercial lease is an exclusivity term. Many commercial leases contain exclusive use clauses, particularly in situations in which the space is located in a larger shopping center that contains numerous tenants. What an exclusive use provision does for you, as a tenant, is allow you to use your leased space to operate your specific type of business (such as a clothing store, grocery store, electronics store, or restaurant) and to restrict or bar other tenants from operating a similar or identical type of business in that same shopping center.
Obtaining these provisions, and then making sure that they are enforced, can be vital for your business. The chances are that the calculations you made regarding whether or not a particular space’s lease terms made business sense for you included assumptions that you would have a certain zone where you were free from direct competition. If you end up facing competition within that zone, you aren’t getting the benefit of the bargain for which you negotiated. Effectively negotiating lease terms, and then aggressively working to enforce those terms, are areas where it pays to have experienced Georgia business counsel.
As an example, consider the federal litigation undertaken recently by a Florida-based supermarket that has several locations here in Georgia. The supermarket had negotiated and signed certain leases in Florida that included exclusivity provisions regarding groceries and pharmacies. The problem came after certain other stores, including a “closeout” retailer and a dollar store, opened locations in the same shopping centers and began selling food. This, according to the supermarket, was a violation of the exclusivity clause.