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Sounds like the Schottenstein’s are not good people.
I bet a judge would rule change the covanent or pay. What stupid thing to have in a leasing contract.
It’s extremely common for those types of covenants to be in restaurant/retail leases. Not common however for the LL not to disclose to potential new tenants.
I’ve heard of these things before. Usually a landlord just doesn’t want too many of the same business in the same strip. If you have 3 fast food places all with the same operating hours aiming for the same or similar customer base, you’re going to have your strip very busy at the same peak hours. Whereas if you have a Starbucks, McDonalds, and Chili’s , you have three different businesses with different peak service hours.
It also would be nice if McDonalds took the high road and let them compete (they seem like different products) and raise the tide for every business in that market…but smart of them to negotiate that deal.
Judgment for the Plaintiff. If the landlord knew to have a waiver signed for Chipotle they should have asked McDonalds to sign a waiver for Raising Cane. The waiver for Raising Cane should be presented to McDonalds–hopefully they would sign. Regardless, the landlord should have to pay the legal fees.
Eliminate the covenant – it’s clearly in bad faith
Nope – it’s a reasonable restriction. What’s not right is the LL playing hide the ball b not telling Raising Cane.
1. This is why tenants and people in general hate landlords.
2. I don’t see the problem here. What McDonald’s sells is clearly not a deboned chicken product. Have you seen pictures of the soft serve ice cream-like crap they make “Chicken” McNuggets out of? I think they make the McRib and hot apple pies out of the same stuff.
Businesses looking to buy a commercial property would of course do a title search before proceeding with the purchase. But why would a business leasing a property do that? The lease agreement should contain all terms (including restrictions on the property) that each party is bound by and agrees to. The omission of such amounts to fraud by the lessor.
Judge will (or should) rule that the whole thing is doing business in bad faith and will rule against the developer. Covering it up and letting Cain’s build a restaurant, that’s just not right.
The words all mean something and Raising Cane’s should have had its legal team review and redline and items that they would have considered to be unacceptable, assuming of course it is explicitly stated.
It is also negotiations in bad faith and likely a negotiated settlement of some kind will result.