Leasing Retail Space

You are planning on starting a small retail business and want to rent space in a small strip mall. The mall owners want me to give them a financial statement, which is normal; but they also want your business plan, you think this is odd. Why would you have to give them this type of document, and how much actual detail do they want? Do you have a legal obligation to provide it? Potential landlords want a business plan for two reasons. The first is that they most likely have commitments with the other tenants as to what types of businesses can be in the mall or strip plaza. As an example, they may have committed that there will be no adult stores. Many malls and strip plazas also have non-competition clauses in their leases. This means that they will only allow one type of store - one lady's wear store, one shoe store, etc. By having your business plan, you're committing to a business style, in writing. If you change and become a competitor of another tenant, they will be able to cancel your lease. By having, your business plan there can be no misunderstanding of what you said you were planning on selling. Second, they want to be reasonably confident that you are going to survive; they want to feel that you have thought out and planned the business. Landlords of malls and strip plazas do not like vacant stores and neither do other tenants. Having tenants come and go gives the shopping location a bad reputation. There are no laws preventing a prospective landlord from asking for a business plan. On the other hand, there are no laws that require that you give one. You can always tell them that you do not have a plan or are not willing to provide it. If that is a deal breaker, so be it, you will go elsewhere. Whether they will demand it or not depends on how easy it is for them to get other interested tenants. Remember that their lease is not a "cast in stone" document until you sign it. Read it over and make changes and exceptions as you see fit. I recommend you take it to a lawyer. The lease they hand you will be very one-sided giving them everything and you nothing. It's only a starting point for negotiations.