Arizona restaurant lease agreement template

Arizona Restaurant Lease Agreement

This Restaurant Lease Agreement (the “Agreement”) is made and entered into as of [Date], by and between [Landlord Name], residing at [Landlord Address] (“Landlord”), and [Tenant Name], residing at [Tenant Address] (“Tenant”).

1. Premises

The Landlord leases to the Tenant, and the Tenant leases from the Landlord, the premises (the “Premises”) located at [Property Address], legally described as [Legal Parcel Identification], consisting of approximately [Square Footage] square feet.

Option A: The Premises includes the following designated parking spaces: [Number]. The location of said parking spaces is shown on Exhibit A, attached hereto.

Option B: Tenant shall have the non-exclusive right to use the parking areas appurtenant to the Building, subject to such reasonable rules and regulations as Landlord may prescribe from time to time.

The Premises also includes the following:

• A kitchen area as depicted on Exhibit B, attached hereto.
• Customer and back-of-house areas as depicted on Exhibit B, attached hereto.
• Option A: The exclusive right to use the outdoor dining/patio area as shown on Exhibit C, attached hereto.
• Option B: The non-exclusive right to use the outdoor dining/patio area as shown on Exhibit C, attached hereto, subject to Landlord’s reasonable rules and regulations.
• A dedicated garbage/waste handling space located at [Location].
• A grease trap located at [Location], with access for maintenance and servicing.
• A vent hood and exhaust system conforming to all applicable codes and regulations.

2. Use

The Premises shall be used solely for the operation of a restaurant.

Option A: The Tenant shall operate a [Type of Food Service, e.g., pizza, burger] restaurant.

Option B: The Tenant may operate any type of restaurant, subject to Landlord's prior written approval, which will not be unreasonably withheld.

The Tenant’s hours of operation shall be [Days of Week], from [Start Time] to [End Time].

Tenant shall not change the use of the Premises or sublease or assign this Lease without the Landlord’s prior written consent, which consent may be withheld in Landlord’s sole discretion.

Tenant shall comply with all Arizona state restaurant licensing requirements, Maricopa County (or local) health department permits, food handler certifications, liquor license (if applicable), and nuisance and noise regulations.

3. Term

The term of this Lease shall be for a period of [Number] years, commencing on [Start Date].

The rent commencement date shall be [Rent Commencement Date].

Option A: Tenant shall have the option to renew this Lease for [Number] additional [Years] year term(s), provided that Tenant gives Landlord written notice of its intent to renew at least [Number] months prior to the expiration of the initial term or any renewal term.

Option B: There are no renewal options.

Early Termination:

• This lease may be terminated early if Tenant fails to obtain or maintain required licenses/permits, or due to repeated and uncorrected health code violations.

4. Rent

The monthly base rent shall be [Dollar Amount].

Option A: Percentage Rent: In addition to the base rent, Tenant shall pay to Landlord percentage rent equal to [Percentage]% of Tenant’s gross sales exceeding [Dollar Amount] in any calendar year.

Arizona Transaction Privilege Tax (TPT): Tenant shall be responsible for paying all applicable Arizona TPT on the rent payments. Landlord will advise Tenant of current TPT rate.

Rent Escalation:

• Option A: The base rent shall increase by [Percentage]% per year, commencing on the first anniversary of the Rent Commencement Date.
• Option B: The base rent shall increase based on the Consumer Price Index (CPI) for All Urban Consumers, Phoenix-Mesa-Scottsdale, AZ, as published by the Bureau of Labor Statistics.

Rent shall be paid monthly, in advance, on the [Day] day of each month, to [Payment Address] or such other place as Landlord may designate in writing.

The security deposit shall be [Dollar Amount]. Landlord may use the security deposit to cover any damages or unpaid rent.

Late fees shall be [Dollar Amount] per day for each day rent is late.

The fee for a non-sufficient funds (NSF) check is [Dollar Amount].

5. Triple Net (NNN) Charges/CAM Fees

Tenant shall pay its proportionate share of all Triple Net (NNN) charges, including property taxes, insurance, landscaping, parking, pest control, and HVAC/filter cleaning. Tenant’s proportionate share is [Percentage]%.

Tenant's NNN charges are estimated to be [Dollar amount] per month.

NNN charges include pass-through of all applicable Arizona-specific taxes and assessments.

6. Compliance with Laws

Tenant shall comply with all applicable building safety codes, ADA accessibility requirements, fire/life safety standards, and ventilation standards as required by Arizona state and local laws.

7. Tenant Improvements

All tenant improvements shall be made at Tenant’s sole cost and expense and are subject to Landlord’s prior written approval. Tenant must submit plans to Landlord for approval.

Tenant shall obtain all necessary permits and comply with all applicable building codes.

Tenant shall provide Landlord with a certificate of occupancy upon completion of the tenant improvements.

All fixtures, including walk-in coolers, refrigerators, and kitchen equipment, shall become the property of the Landlord upon the expiration or termination of the Lease, unless otherwise agreed to in writing.

8. Repair and Maintenance

Tenant shall be responsible for maintaining the Premises in good repair and condition, including the kitchen, grease traps, exhaust hoods, HVAC/rooftop units, drains, floor mats, walk-ins, and specialized cooking equipment.

Tenant is responsible for regular pest control.

Landlord shall maintain the structural integrity of the building, including the roof and exterior walls.

Tenant is responsible for regular cleaning of the premises, including interior and exterior.

9. Inspections

Tenant shall allow Landlord to conduct regular health and fire inspections. Tenant must promptly remediate any violations.

10. Insurance

Tenant shall maintain commercial general liability insurance (including products liability and liquor liability if alcohol is served) with limits of not less than [Dollar Amount] per occurrence and [Dollar Amount] in the aggregate, naming Landlord as an additional insured.

Tenant shall maintain property and contents insurance.

Tenant shall maintain workers’ compensation insurance as required by Arizona law.

Landlord shall maintain property insurance on the building. Tenant will reimburse their share of premium.

11. Landlord Entry

Landlord shall have the right to enter the Premises for inspection, emergency, repairs, and compliance purposes, after providing Tenant with reasonable notice as required by Arizona law, except in emergencies.

12. Waste Disposal

Tenant shall store and dispose of all food waste, grease, oil, and hazardous materials in compliance with all applicable Arizona and local environmental ordinances.

13. Signage

Tenant shall have the right to install signage on the Premises, subject to Landlord’s approval and compliance with all applicable local signage codes and health department rules.

Signage type, size, and illumination are subject to Landlord approval.

14. Patio/Outdoor Dining

Tenant’s use of the patio/outdoor dining area shall be subject to Landlord’s rules and regulations and compliance with all applicable local license or decibel restrictions.

15. Utilities

Tenant shall be responsible for paying all utility services, including water/sewer, electricity, garbage, recycling, natural gas/propane, and telecommunications.

Tenant shall be responsible for any special restaurant utility loads.

16. Parking

Tenant shall have the right to use [Number] parking spaces for staff and customers.

Loading/distribution/delivery areas are as shown on Exhibit D.

ADA parking spaces are designated as required by law.

17. Trash Removal

Trash/recycling/grease pick-up schedule and location shall be in accordance with city and county health department mandates.

18. Default

If Tenant fails to pay rent or otherwise breaches this Lease, Landlord shall have the right to terminate this Lease or pursue any other remedies available under Arizona law, including accelerated rent. Loss of essential licenses or repeated health code breaches constitute material default.

19. Notices

All notices shall be in writing and delivered by certified mail, return receipt requested, to the following addresses:

Landlord: [Landlord Name], [Landlord Address]

Tenant: [Tenant Name], [Tenant Address]

20. Move-In/Move-Out

The parties shall conduct a move-in inspection and complete a move-in condition report.

Upon termination of the Lease, Tenant shall restore the Premises to its original condition, remove all personal property and equipment, and comply with Landlord’s cleaning requirements.

Landlord shall have the right to recover or forfeit the security deposit in accordance with Arizona law.

21. Indemnification

Tenant shall indemnify and hold Landlord harmless from any and all claims, damages, and liabilities arising out of Tenant’s use of the Premises, including, but not limited to, food safety issues and regulatory noncompliance.

22. Subordination

This Lease shall be subordinate to any mortgage or deed of trust encumbering the Premises.

Tenant agrees to execute a Subordination, Non-Disturbance, and Attornment Agreement (SNDA) upon request.

Tenant agrees to provide estoppel certificates upon request.

23. Compliance with Laws

Tenant shall comply with all applicable Arizona state, county, and city statutes, ordinances, zoning regulations, building codes, public health food and safety rules, outdoor dining mandates, and regulations governing restaurants, including Arizona liquor laws, smoke-free laws, and employee wage/hours laws where applicable.

24. Dispute Resolution

Any disputes arising out of or relating to this Lease shall be resolved through negotiation, mediation, and, if necessary, litigation in Maricopa County, Arizona.

25. FIRPTA

Landlord shall provide Tenant with an affidavit stating whether Landlord is a foreign person under the Foreign Investment in Real Property Tax Act (FIRPTA).

26. Landlord Obligations

Landlord shall provide and maintain essential utilities and physical systems (grease trap, exhaust, HVAC) in working order at the delivery of premises.

27. Franchise Standards

Tenant shall comply with all franchise or concept-specific brand standards, if applicable.

28. Force Majeure

Neither party shall be liable for any failure to perform its obligations under this Lease if such failure is caused by a force majeure event, including regulatory closure or health crisis.

29. Menu Changes

Changes to menu, hours, or operational style require Landlord consent if material to property use or permitted by an exclusive use clause.

30. Arizona Department of Revenue

Tenant shall comply with all applicable Arizona Department of Revenue reporting requirements, Transaction Privilege Tax requirements, and city food sales taxes.

This Lease shall be governed by and construed in accordance with the laws of the State of Arizona.

Any waiver by Landlord of any default by Tenant shall not be deemed a waiver of any subsequent default.

Time is of the essence of this Lease.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

____________________________

[Landlord Name]

____________________________

[Tenant Name]