Fitness Business Lease Agreements

Insights by Daniel Mainzer 


Daniel Mainzer’s guest post for the Active Management. He explains six of the most common pitfalls affecting fitness business owners when negotiating leases.

You have finally found a perfect location for your business, the owners corporation rules are not onerous, you can open 24 hours, run classes from the early hours of the morning until late into the night. The location, look and feel of the premises is just perfect and it fits your meticulous nature, that perfectionist in you which wants everything just right. My tip? Pay attention to the lease. Be alert to the potential legal traps early on and avoid the heartache later.

You cannot predict the future, but we can make your life easier by pointing out six of the most common pitfalls affecting fitness business owners when negotiating leases.

#1 Permitted use

A lease may give you exclusive rights to use, occupy and run your business from a premises but it does not give you a right to do whatever you choose. Every lease will specify what the business owner may use the premises for. Our experience has shown that if you do not pay attention to how the permitted use is expressed, it is highly likely that it will exclude aspects of your business which may be integral to your financial success. It could be that if a permitted use is too prescriptive, it may bar a fitness business from introducing new cutting edge classes.

#2 Know your lease – the devil is in the detail

Read and understand the lease! A lease is never ‘standard’. Often, a lease will require the tenant to undertake certain works. This may include, painting the walls every five years or entering into a service contract with a reputable company for air conditioning maintenance. To comply with these obligations, you must:

  1. diarise when these obligations are due; and
  2. ensure that you are in a financial position to undertake these repairs.

If these obligations seem onerous, there is no harm in trying to negotiate these clauses before signing the lease. If you are unable to undertake these repairs, you may be in breach of the lease and the landlord may not hesitate to terminate the lease leaving you with potentially heavy financial loses, a business but no premises.

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