Modify Radius Clause to Protect Right to Expand Beyond Center
Including a radius clause—that is, a clause barring you from opening another store within a certain distance, or radius, of your existing location—in a percentage rent retail lease is common. Owners typically include a radius clause in percentage rent leases so that you can’t divert sales to a new store, in effect competing with yourself and depriving the owner of percentage rent. If you violate the radius clause, the owner can use the special remedies set out in the clause against you. But sometimes, radius clauses have the potential to hurt you and the owner.