Delaware restaurant lease agreement template

Delaware Restaurant Lease Agreement

This Restaurant Lease Agreement (the “Agreement”) is made and entered into as of [Date], by and between [Landlord's Full Legal Name], a [Landlord's Business Entity Type], with an address at [Landlord's Address] (hereinafter referred to as "Landlord"), and [Tenant's Full Legal Name], a [Tenant's Business Entity Type], with an address at [Tenant's Address] (hereinafter referred to as "Tenant").

1. Premises

The Landlord leases to the Tenant and the Tenant rents from the Landlord, the premises located at [Property Address], and legally described as [Legal Description of Property] (the "Premises").

The Premises comprises approximately [Square Footage] square feet and includes the following designated areas:

• Dining Areas
• Kitchen and Food Preparation Zones
• Bar/Taproom Space (if applicable)
• Storage Area
• Walk-in Refrigerator/Freezer [Specify Number and Size]
• Grease Trap Location: [Location]
• Vent Hoods: [Specify Number and Size]
• Exclusive Use Areas: [e.g., Patio Area Details]
• Common Areas: [e.g., Parking for Guests and Employees, Delivery Access, Dumpsters, Loading Docks]

2. Use of Premises

Option A: The Premises shall be used solely for the operation of a restaurant, including on-site dining, take-out, delivery, catering, and the sale of alcoholic beverages, subject to obtaining and maintaining all required licenses and permits.

Option B: The Premises shall be used solely for the operation of a [Type of Restaurant, e.g., Italian Restaurant, Fast Food] restaurant, including [Specify Permitted Activities], subject to obtaining and maintaining all required licenses and permits.

The Tenant shall not change the use of the Premises or sublet the Premises without the Landlord’s prior written consent, which consent shall not be unreasonably withheld.

The Tenant shall comply with all Delaware state and local restaurant, health, food safety, and liquor licensing laws and shall maintain all required operational permits and licenses, including those from the Delaware Division of Public Health and any local municipal food service permits.

3. Lease Term

The term of this Lease shall commence on [Commencement Date] (the "Commencement Date") and shall expire on [Expiration Date] (the "Expiration Date"), unless sooner terminated as provided herein.

Possession Date: [Date].

Option A: Renewal Options: The Tenant shall have the option to renew this Lease for [Number] additional term(s) of [Length of Renewal Term] each, provided that the Tenant gives the Landlord written notice of its intent to renew at least [Number] months prior to the Expiration Date.

Option B: Right of First Refusal/Expansion: If the Landlord intends to lease any adjacent space, the Tenant shall have the right of first refusal to lease such space, subject to terms to be negotiated in good faith.

Conditions and Penalties for Early Termination or Default: [Specify Conditions and Penalties]

4. Rent

Base Rent: The Tenant shall pay to the Landlord base rent in the amount of [Dollar Amount] per [Month/Year], payable in advance on the [Day] day of each [Month/Year] commencing on [Rent Commencement Date].

Security Deposit: The Tenant shall deposit with the Landlord a security deposit in the amount of [Dollar Amount], to be held by the Landlord as security for the Tenant’s performance of its obligations under this Lease. The security deposit shall be handled according to Delaware law.

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

Option B: No Percentage Rent.

Delaware Gross Receipts Tax: [Specify Allocation of Delaware Gross Receipts Tax Responsibility]

Escalation Formula:

• Option A: CPI Adjustment: The base rent shall be adjusted annually based on the Consumer Price Index (CPI) for [Specific CPI].
• Option B: Fixed Annual Increase: The base rent shall increase by [Percentage]% annually.

Common Area Maintenance (CAM) Charges: The Tenant shall pay its proportionate share of CAM charges, which shall be calculated as [Calculation Method, e.g., Tenant’s square footage divided by total rentable square footage].

Utility Allocation: The Tenant shall be responsible for the following utilities: [List Utilities, e.g., water, gas, electric, sewer, trash]. Allocation shall be determined by [Method, e.g., direct metering, proportionate share].

Local Taxes and Assessments: [Disclose Any Local Taxes or Assessments]

5. Maintenance and Repair

Tenant’s Responsibilities: The Tenant shall be responsible for maintaining and repairing the following:

• Kitchen Equipment
• Vent Hoods
• Grease Traps
• Fire Suppression Systems
• HVAC serving the Kitchen
• Refrigeration Systems
• Plumbing Systems
• Pest Control
• Cleanliness of the Premises
• Ongoing Code Compliance

Landlord’s Responsibilities: The Landlord shall be responsible for maintaining and repairing the following:

• Structure of the Building
• Roofing
• Shared Building Systems

6. Tenant Improvements

Allowed and Required Tenant Improvements: [List Allowed and Required Improvements, e.g., Buildout, Install Kitchen Equipment, Furnishings, Signage, Exterior Vents].

Landlord Approval Process: All tenant improvements shall be subject to the Landlord’s prior written approval, which shall not be unreasonably withheld.

Compliance with Delaware Building Code and ADA: All tenant improvements shall comply with the Delaware Building Code and ADA accessibility requirements.

Obligations for Permits and Inspections: The Tenant shall be responsible for obtaining all necessary permits and inspections for tenant improvements.

7. End of Lease

Restoration Requirements: Upon the expiration or termination of this Lease, the Tenant shall restore the Premises to its original condition, reasonable wear and tear excepted.

Ownership of Fixtures: [Specify Ownership of Fixtures].

Landlord’s Claim to Tenant-Installed Equipment: [Specify Landlord’s Rights to Tenant-Installed Equipment].

Removal or Abandonment of Assets: [Specify Procedures for Removal or Abandonment].

8. Operational Requirements

Trash Removal: [Specify Trash Removal Procedures].

Grease Management: [Specify Grease Management Procedures].

Odor and Exhaust Control: [Specify Odor and Exhaust Control Measures].

Noise Limits: [Specify Noise Limits].

Parking Management: [Specify Parking Management Procedures for Guests and Delivery Vehicles].

Restrictions on Outdoor Dining, Signage, and Exterior Modifications: [Specify Restrictions, Subject to Local Ordinances and Landlord Rules].

9. Insurance

Commercial General Liability Insurance: The Tenant shall maintain commercial general liability insurance with a minimum coverage of [Dollar Amount] per occurrence and [Dollar Amount] in the aggregate.

Property Insurance: The Tenant shall maintain property insurance covering the Premises and the Tenant’s personal property therein.

Liquor Liability Insurance (If Applicable): If the Tenant sells alcoholic beverages, the Tenant shall maintain liquor liability insurance with a minimum coverage of [Dollar Amount].

Additional Insured: The Tenant shall name the Landlord as an additional insured on all insurance policies.

Compliance with Local Mandates: The Tenant shall comply with any elevated coverage locally mandated for food service.

10. Fire Safety

Fire Safety Systems: [Specify Responsibilities Regarding Fire Safety Systems].

Equipment Inspections: [Specify Requirements for Equipment Inspections].

Compliance with Delaware Fire Marshal Regulations: The Tenant shall comply with all Delaware Fire Marshal regulations.

Routine Reporting: [Specify Requirements for Routine Reporting].

11. Access

Landlord Entry: The Landlord shall have the right to enter the Premises for maintenance or inspection purposes, after providing the Tenant with reasonable notice, except in cases of emergency.

Tenant Notice Obligations: The Tenant shall notify the Landlord immediately of any property damage, required repairs, pest infestations, or code violations.

12. Licenses and Permits

The Tenant shall be responsible for obtaining and maintaining all necessary licenses and permits, including a Delaware business license, food establishment permit, liquor license (if applicable), and any required patio/outdoor seating approvals.

The Tenant shall immediately notify the Landlord of any regulatory problems, health or fire code violations, or sanctions.

13. Financial Reporting

If rent is tied to restaurant sales, the Tenant shall provide the Landlord with periodic sales statements [Specify Frequency, e.g., monthly, quarterly].

The Landlord shall have the right to audit the Tenant’s sales records.

14. Use, Signage, and Advertising Restrictions

The Tenant shall comply with all applicable Delaware outdoor sign requirements and municipal sign codes.

15. Non-Competition/Exclusivity

Option A: Non-Competition Covenants for Landlord: [Specify Non-Competition Covenants, if any, for Landlord].

Option B: Exclusivity Rights for Tenant: [Specify Exclusivity Rights, if any, Granted to Tenant].

Restrictions on Use of Other Spaces: [Specify Restrictions on Use of Other Spaces for Food Service].

16. Default and Remedy

Default and Remedy Provisions: [Specify Delaware-Specific Notice and Cure Periods, Re-entry and Eviction Procedures Consistent with Delaware Commercial Landlord-Tenant Law, and Lien Rights]

17. Compliance with Laws

The Tenant shall comply with all Delaware commercial property, tax, environmental, ADA, local health, and fire regulations.

18. Move-In and Move-Out

Move-In Logistics: [Specify Move-In Logistics, Coordination of Health Inspections or Equipment Installations].

Move-Out Logistics: [Specify Move-Out Logistics].

Tenant Improvement Punch-List: [Specify Completion of Tenant Improvement Punch-List with Clear Timelines].

19. Condition of Premises

The Premises shall be delivered in [Condition, e.g., broom clean] condition.

Upon termination, the Tenant shall return the Premises in [Condition, e.g., broom clean] condition, reasonable wear and tear excepted.

Security Deposit Deductions: [Specify Permitted Deductions from Security Deposit].

Dispute Regarding Asset or Fixture Ownership: [Specify Procedures for Resolving Disputes].

20. Dispute Resolution

Dispute Resolution Methods: Negotiation, Mediation, Delaware-based Arbitration, Delaware Court Jurisdiction, and Application of Delaware Law.

21. Labor Laws

The Tenant shall comply with all applicable labor laws, wage/hour regulations, and worker safety protocols as a Delaware food and beverage operator.

22. Assignment and Subletting

The Tenant shall not assign this Lease or sublet the Premises without the Landlord’s prior written consent, which consent shall not be unreasonably withheld. Landlord approval of new restaurant operator with requisite licensing and experience is required, and corresponding Delaware regulatory notification obligations must be met.

23. Operating Partners and Key Personnel

The Tenant shall disclose its operating partners, managers, and any key personnel changes that may trigger additional regulatory requirements.

24. Closure or Cessation of Business

The Tenant shall provide the Landlord with [Number] days written notice prior to closure, cessation of business, or vacating the Premises. The Tenant must maintain minimum food service hours as may be required by local ordinances or as negotiated.

25. Government Incentives

[Specify any Delaware or local government incentives, restrictions, or programs applicable to restaurant tenancy, if relevant].

26. Landlord Access for Inspections

The Landlord shall have the right to access the Premises for inspections by health, fire, or building authorities in coordination with the Tenant and as required by Delaware law.

27. Food Safety and Hygiene

The Tenant shall be responsible for pest prevention, grease and oil disposal, backflow prevention, and HACCP plan adherence if required for this restaurant type.

The Tenant shall provide immediate notification to the Landlord and rapid corrective action in case of health inspection failures, public health emergencies, or foodborne illness outbreaks as mandated in Delaware.

28. Sidewalk Dining

[Specify Restrictions and Procedures involving Sidewalk or Public Right-of-Way Dining and the Corresponding Permitting Obligations under Delaware or Local Law]

29. Security Deposit Handling

[Specify Procedures and Standards for Security Deposit Handling, Return and Accounting, Compliant with Delaware Statutes]

30. Liquor License Transfer

[State Limitations and/or Requirements Related to Liquor License Transfer, Insurance Coverage Transitions, and Landlord Cooperation in Regulatory Matters when Changing Operators on the Premises]

31. Restaurant Risk

This Agreement is tailored for restaurant risk, including unique food industry liability, employee injury (workers’ comp requirements), and protection from business interruption.

32. Delaware Taxes

The Tenant shall comply with Delaware-specific taxes and filing/reporting obligations (state business license, gross receipts tax, county/municipal business taxes as relevant to restaurants), and shall provide documentation of timely payment as a Tenant obligation.

33. "Go-Dark" Rights

[Define any “go-dark” rights and remedies for extended closure, consistent with Delaware law on commercial lease default]

34. Mixed-Use Property

If the Premises are part of a mixed-use property, this Agreement addresses compatibility requirements with residential/retail tenants, delivery restrictions, and limits on hours of operation as required by local zoning or negotiated with the Landlord.

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

[Landlord's Full Legal Name]

By: [Landlord's Signature]

Name: [Landlord's Printed Name]

Title: [Landlord's Title]

[Tenant's Full Legal Name]

By: [Tenant's Signature]

Name: [Tenant's Printed Name]

Title: [Tenant's Title]