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Opening a first store feels like momentum. The lease behind it decides whether that momentum scales or stalls.
Treat the document as your operating system: what you sign now sets cost, flexibility, and precedent for every deal that follows. A good store can still be dragged by a bad lease; a disciplined lease can keep a mediocre first site from becoming a balance-sheet anchor.
Why “easy now” gets expensive later
Speed is seductive. You accept a long term, light TI, a wide radius, and vague rent-start language because construction is queued and the launch date is public. Eighteen months later, the format needs a tweak, a stronger submarket emerges, and your next landlord is pricing against the comp you just set. Exit is costly. Expansion is fenced. Your leverage is lower because your first contract telegraphed you’d take rigidity over discipline.
It’s not about “winning”—it’s about matching term to proof
You won’t get every clause. You don’t need to. Start with what you’re proving and how fast you’ll know. If payback is 18–24 months on a light build, a shorter base term with options and a performance out makes sense, even if rent is a touch higher and TI thinner. If the box is infrastructure-heavy, a longer term can be rational—provided rent starts on true delivery, relocation rights are clear, and sales kickers only engage at a high hurdle. The point is proportionality: commitment that matches evidence, flexibility where the risk is highest.
Real estate is not just a place—it’s precedent
Your first site tells landlords, investors, and your own team how you intend to grow. A flashy, high-street box can build brand heat but teach you little about what will scale; a demand-led site in a representative trade area yields the data you need for Stores 2–10. There’s no single right answer—only the one that matches your margin structure, capital plan, and risk tolerance. Pick the location that helps you learn fast and negotiate better next time.
The clauses that move the P&L
- Rent start and delivery: Tie rent to actual possession and landlord work completion, in writing. Soft delivery slips kill month one economics.
- Kick-out or break: A defined exit after a test period caps downside and forces a data-driven decision. No kick-out? Trade for a fixed break fee or a year-one rent ramp.
- Radius and exclusives: Narrow by distance, duration, and format so one store doesn’t block the next market or a pop-up that feeds demand.
- TI and abatements: Cash TI (or abatement) eases capex and sets a benchmark. Expect some give—term length, base rent, or guarantees—but document an amortization schedule so “payback” doesn’t morph later.
- Assignments and transfers: Protect the ability to sublease, assign, or relocate. Future you will need options you can execute without a landlord veto.
Precedent is real
Landlords talk. Brokers remember. Your first paper becomes your posture. If it shows clear thinking—e.g., options aligned to payback, clean rent-start mechanics, sensible radius—future deals tend to get easier, not harder. If it reads like a rush to keys, you’ll keep paying for speed in the form of rigid terms and thin concessions.
A simple test before you sign
Read the LOI and answer three questions out loud:
- Downside: If the store misses, can we exit or reset without torpedoing the rollout?
- Growth: Does anything here fence out our next logical site or format?
- Cash: Do TI, abatement, and rent-start mechanics match our build, schedule, and payback?
If the answers aren’t crisp, you’re buying risk you don’t need.
Bottom line: A lease isn’t a task to clear on the way to opening. It’s the blueprint that determines what you can build next. Make the tradeoffs on purpose, match commitment to proof, and lock the mechanics that protect cash and options. Your future stores will thank you.
