Retail leases and business competition

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As a business operator, you will nearly always face the challenge of competition.

Determine who your competitors are and what they are doing well. Understand your customers and clients and how you can deliver what they want more effectively than your competitors do. Monitor trends and developments in your sector and be ready to respond.

In a multi-outlet centre or building, some tenants have the right to be the only retailer of a certain type of goods or service – this is called exclusive use.

The lease and the lessor’s disclosure statement specify the permitted use of the premises and whether that permitted use (or specific menu item or items or service) is exclusive to that tenant.

For the tenant, exclusive use reduces or eliminates competition from nearby retailers because it gives the advantage of being the only retailer of their goods or services in that location.

The landlord must ensure that permitted uses for future tenants don’t infringe on the exclusive use rights of existing tenants.

If you have an exclusive use clause in your lease and think that another retailer is competing unfairly with you, first check the relevant clause in your lease.

If you think your exclusive use right has been breached, you can raise it with your landlord. Make sure that you keep a written record of any conversations about the issue.

You can also get advice from your lawyer or you can contact the Dispute Resolution Unit in the NSW Small Business Commissioner on we.assist@smallbusiness.nsw.gov.au or phone 1300 795 534.

More information

The Australian Competition and Consumer Commission (ACCC) does not generally get involved with individual small business disputes, but it does work on several areas that have a direct impact on small businesses.

These include anti-competitive behaviour, business rights and protections, unfair contract terms, franchising, collective bargaining and boycotts, and protection against scammers.

The ACCC also works on subjects relevant to the customers of small businesses, including product safety, country of origin claims and treating customers fairly.

For help to make your business more competitive, contact Business Connect, the NSW Government’s state-wide, independent business advisory service.

Business Connect advisors can help with a range of issues including starting a business, marketing, skills development, digital readiness and more.

Register online or call 1300 134 359 to book an appointment with a trusted advisor in your area.