A lease agreement is a contract between a property owner (landlord) and a tenant that outlines the terms and conditions of renting a property. In hospitality, this is often a business owner leasing a space for their restaurant, cafe or hotel. The agreement will state the length of the lease, rent amount, payment schedule, maintenance responsibilities and any restrictions on use of the property.
Leases are key in hospitality because they provide a foundation for the business. They give security and stability so owners can plan long term and invest. A well-negotiated lease can make a big difference to a business’s profitability by getting good rent terms and conditions. It also clears up responsibilities so there’s no disputes between landlord and tenant.
So let’s say you’re opening a new bistro in a hip part of town. You’ve found the perfect location but it needs some work. You negotiate a lease with the property owner that includes a rent-free period for the first 3 months to offset your renovation costs. The agreement states you’re responsible for interior maintenance and the landlord is responsible for exterior and structural repairs. You’ve negotiated a 5-year term with an option to renew for another 5 years so you have security to invest in top-quality kitchen equipment and décor. This lease becomes the foundation of your business plan so you can budget accurately and focus on creating a great dining experience for your customers.'