I recently received a distressed call from a beauty salon owner who had just signed a ten-year lease on a full floor of retail space on a prominent avenue in midtown Manhattan. The store was on the second floor of a small retail/office building and boasted large windows that ran almost the entire width of the space. Immediately below his store was a chain restaurant with a prominent sign above its storefront.      This particular salon owner had owned several similar businesses in the City and knew what it would take to attract walk-in clientele. Shortly after taking possession, the salon owner installed neon signs on the windows with the name of the business. As is custom...

Do you have Clients that are buying/selling restaurants? Glenn D. Wright of the Wright Law Firm, PC will be a panelist at the New York Society of Certified Public Accountants (NYSSCPA) Hospitality & Restaurant Committee Breakfast Technical Session 2016 on January 5, 2017 at 8:30 a.m.The seminar's target audiences are legal, financial and accounting professionals who advise their Clients on the all aspects of buying/selling restaurants.Certified Public Accountants seeking Specialized Knowledge (NYSED) / Specialized Knowledge (NASBA) credit should attend as well as transactional attorneys or restaurateurs interested in the intricacies and potential minefields inherent...

What to look for in well-drafted construction contracts? Many architects and contractors use the American Institute of Architects (AIA) pre-printed, “fill in the blank” form contracts. Although these AIA forms are a good, fundamental starting point, most attorneys draft extensive riders to supplement them. The riders are frequently proposed by the owner’s lawyer because the AIA form is drafted to favor the interests of the architect or contractor. Some contractors on small projects may forgo formal construction contracts altogether and give the owner an estimate, payment schedule and a brief description of the scope of work. Although this gives the contractor flexibility to figure...

There are several important issues to consider when buying or selling Limited Liability Company membership interests. There are usually provisions in operating agreements that address the process involved in transferring a member's interest. What type of provisions? For starters, they require the member to provide notice of the transfer to the other members. In addition, many operating agreements include a right of first refusal. This right gives the company the option to buy back the membership interests on the same terms as those of the proposed sale to a third party. Many LLC operating agreements contain restrictions that only permit a sale with unanimous consent of all the...

If you are having problems with a general contractor and want to hire a different one for the project; you should tread carefully. Regardless as to how justified you feel in doing so, always look carefully at the reasons why you want to fire your contractor. Terminating a general contractor should only be done when there is a well-documented history of conduct that is clearly in violation of their duties and responsibilities pursuant to the contract. If that is not the case, you may be sued for wrongful termination and have to pay large monetary damages. You should always consult a construction lawyer before you fire your contractor. A recent case involved a building owner...

  Given that the long-overheated office market in Manhattan is starting to cool, commercial leases are beginning to get somewhat more tenant-friendly. One way that landlords are sweetening deals for tenants is to give them a lease option to expand in the same building as their office needs grow. This is especially popular in "silicon alley" in the Flatiron neighborhood. Westbrook Partners recently entered into such a deal with a tech company giving it the right to double its square footage at a later date. The ability to grow without uprooting their location is very valuable to start-up tenants. These firms are attempting to establish themselves as stable, mature companies. They...

Many people do not consult a lawyer before buying a franchise and signing a Franchise Disclosure Document (“FDD”).  Prospective franchisees are frequently told by the franchisor that the FDD is not negotiable. Financial Disclosure Documents are in fact somewhat negotiable and a good franchise lawyer can revise the language and obtain some concessions. More importantly, an experienced franchise lawyer can “read between the lines” of the FDD, evaluate the franchise and assess what exactly the franchisee is buying. Very few franchisors provide any representations about their financial performance.  When they do, they disclose the average gross sales of their existing franchisees....

           The New York Appellate Division recently narrowed the protection a clause in the standard office lease form afforded landlords and building owners. Landlords always insisted on lease language stating that they are making no representations as to the legality of the tenant's proposed use of the premises. More specifically, the clause states that the owner does not promise that the planned use of the space complies with the certificate of occupancy. In the case, Jack Kelly Partners v. Zegelstein, originally heard in Manhattan Supreme Court, the landlord advertised the space as a commercial unit despite it being zoned solely as residential. The lease also limited the tenant...

     Most prospective commercial tenants, prior to the move-in date, need to modify the space to suit their business’s needs. Whether it is a raw space (a “vanilla box”) or built to the specifications of the prior tenant, extensive renovations are almost always required. Unless the new tenant is a chain with other locations, they may not yet have a definitive layout and design in mind for the space. The construction plans must be thought through prior to finalizing the lease. The tenant's architect should not only have preliminary plans prepared but also should review the build-out clauses in the lease. Aside from clauses addressing whether the space can meet the...

     Last week, the Appellate Division, First Department, ruled that New York State Courts do not have the authority to dissolve out-of-state corporate entities. This is a departure from a long line of cases holding that when a company has its principal place of business in New York, New York Courts can consider judicial dissolution proceedings. This ruling in Raharney Capital v. Capital Stack will make it difficult for aggrieved shareholders to obtain recourse in New York. Judicial dissolution proceedings are frequently filed by shareholders or limited liability members when they are in a dispute with their business partners. Typical causes of action in these types of proceedings...