Tenant Improvement: Did a franchisee’s mandatory remodel diminish the leasehold value?
Shortly after signing a 20-year lease, the fast food franchise tenant remodeled the store per its franchise agreement. The process eliminated a “greenhouse” wall and about 300 sq. ft. of floor space. The new building owner demanded compensation for the lost area even though the lease was not based on area. After trial and appeal, the franchisee won.Download Case Study