What Is The Permitted Use Provision In A Restaurant Lease?

One of the more important non-monetary lease provisions included in a restaurant lease is the "Permitted Use" provision. The permitted use provision, as it sounds, sets forth the type of business a tenant is actually allowed to conduct in a premises. For example, if the tenant wants to operate a boxing gym, the tenant should ensure that the permitted use allows for a boxing gym.

Tenants will often try to have the permitted use provision drafted as broadly as possible so they can conduct other ancillary uses in the premises and not be held in default for expanding on the actual permitted use. Landlords, on the other hand, will try to draft this provision as narrowly as possible. Landlords like to control, to the extent possible, what actually happens in their buildings for various reasons. One very important reason is because they need to make sure they don't breach an "Exclusivity Clause" with another tenant.