how to wreck your cafe without really trying

cafelawyer

It happens all the time.

New client. Old lease. 5 x 5. Forgot to exercise option. Cafe is now on a month to month lease and potentially worthless. Landlord is now asking for a silly rental. This is not an isolated occurrence.

It happens all the time.

It made me wonder. Would a street side cafe survive a relocation "up the road" / next block / next suburb? I doubt it. Any stories of successful side-steps out there ?

In most cases, starting again is a legitimate option if the cafe still wants to trade but it is also a perfect waste of money.

beanflying

Seen it happen, nearly saw it up close and personal by nearly forgetting to formally exercise an option for my own business :🙂 In my lease it was a minor section of a fairly lengthy document so it would have been easy to miss or forget after signing the document several years before. Good one to bring up 🙂

admin

just wondered how things are going for cafe owners up in Qld - anyone got any stories to share? A

askthecoffeeguy

Try owing a cafe in the university environment where leases are often two plus three - and the landlord is under no obligation to renew the option! Glad I cashed out when I did!

cafelawyer

askthecoffeeguy wrote:

Try owing a cafe in the university environment where leases are often two plus three - and the landlord is under no obligation to renew the option! Glad I cashed out when I did!

Student Unions and the those that operate the retailing side of University campus leasing are rarely motivated by commercial reality. In my final year of Uni, the Student Union - which controlled the leasing of the entire food hall, banned all Nestle products from sale on campus. I am sure there was a good reason for it - just like refusing to grant reasonable lease terms to smart operators. Uni sites are no different to anywhere else, they must be sold at the right time for the right price and I am glad you did !!

cafelawyer

admin wrote:

just wondered how things are going for cafe owners up in Qld - anyone got any stories to share? A

Not directly, but the retail leasing regime dealing with damage to premises is fairly uniform throughout Australia. Landlords have the option to reinstate / repair flood damaged premises and rental would ordinarily abate (cease) in the meantime. But that also means no trade, no profit, no income for however long it takes to sort it out with the insurer. Operators should check insurance cover and especially the scope of their business interruption cover for starters.

beanflying

admin wrote:

just wondered how things are going for cafe owners up in Qld - anyone got any stories to share? A

There is a Melbourne based cafe whose premises got flood damaged badly last year in the March storms who are still doing battle with a landlord wanting to enforce a lease after the premises became unusable for an extended period of time. Mediation continues. Bound to be similar issues in Qld I am sure.