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Covid 19 Impact On Franchisees And Tenants

On Behalf of | Mar 17, 2020 | Firm News

Franchisees –

If you are unable to stay open for business because of the COVID 19 epidemic/pandemic, you should have discussions with your franchisor to strategize on the best way to handle the situation.  Having open discussions with your franchisor allows both parties the opportunity to arrive at solutions that benefit everyone.  Your situation as it relates to this novel situation is not unique, but shared by all franchisees and the franchisor may already have a strategy in mind.

Tenants –

Although many of you have Force Majeure (Acts of God) clauses in your leases with your Landlord, those clauses typically do not relieve you from paying rent to the landlord (although some may).  First thing you should do if you need to close your business is to consult with us (if we handled your lease) to determine if the Force Majeure clause in the lease provides you with the ability to abate or defer rent and additional rent charges.  If it does not, then you will still be required to pay rent, even if you are required to close your business due to a government edict (federal, state or local).  If you decide you want to close, but the federal, state or local governmental authority has not required closure, speak to your Landlord and discuss the situation. If the Landlord agrees to your closure, make sure to confirm that agreement via email or other written form so you have a paper trail of that agreement.  Please understand that even if you are closed, you will likely be required to still pay rent, loan payments and utilities.  They will not evaporate just because you are closed for business.

Erin, Rebecca, Sara and Nancy are all here to help you with the legal issues you are facing.  Please feel free to call on us during these difficult times.  We hope you and your family stay well!