Business plans do not always work out as hoped. Those who succeed frequently experience many setbacks along the way. It’s often said that those who can change and adapt the quickest are more likely to survive in business than those who can’t.
Staying lean and flexible is not always easy when you need a physical premises to operate. Landlords want a stable income, so they don’t want tenants who are there one day and gone the next. Typically, they will insert clauses into their lease agreement that obligate the person or company leasing the premises to pay for a minimum period, whether they occupy the place or not. If they wish to leave early, they would either have to pay the remainder of the contract or pay a prohibitive one-off penalty.
Astute business owners might decide that while their original idea is not working out, another business idea could function in these same premises. Do they have the right to switch to another type of business?
It depends on the situation
There is no one-size-fits-all answer to this question, and moving to another line of business is not always allowed. Sometimes, it is the local planning authorities who prohibit it. For example, let’s say you open a clothing store in the space you lease and wish to change to running a takeout there instead. Zoning laws might not allow places selling food on that block. While you could apply for an exception, there is no guarantee you would get it.
The owner of the premises might also try to stop you. They may have put a use of premises clause in the contract you signed that limits what types of businesses are allowed. Maybe there is no clause, but they insist that you cannot make the change. If you find yourself in a dispute over your commercial lease, it’s wise to get experienced legal guidance to explore your options.
