OP-ED by Marcus Bosch, Proactive Property Group

The “survive to 25” mantra that dominated our psyche in 2024 is finally becoming reality…. We’re seeing the green shoots of expansion activity, franchisors seeking locations, retailers reopening discussions with landlords, hospitality groups eyeing new premises, manufacturers seeking additional manufacturing capacity.

But here’s what’s also happening as expansion accelerates… Most business owners sign their lease with less scrutiny than they apply to buying a car. And months later, that “simple” document becomes the thing that quietly drains their cashflow, limits their options, and sometimes threatens the entire business.

If you’ve ever felt that tightening-in-the-gut feeling reading a lease clause you don’t fully understand, you’re not alone.

Let’s talk about what your lease really is

It’s not a simple (residential) tenancy agreement.

It’s not a piece of paper you sign.

It’s not a formality standing between you and your new store.

Your lease is:

• A five to six figure financial commitment disguised as a PDF     
• A legally binding promise about how your business must operate      
• A profit lever or a profit leak       
• A contract designed by landlords who negotiate leases for a living

And here’s the kicker: A single clause you overlook today can cost you more than the entire fitout over the lease term.

The Hidden Trap Most Tenants Miss

Example: Poorly worded CPI or fixed increase rent review clauses can lock you into paying 15-25% more rent than your competitors over the term of your lease. Simply because they negotiated a review cap or soft market ratchet option and you didn’t.

Recently, I helped a hospitality group renegotiate two leases during their renewal window, saving them $180K over the next term simply by benchmarking market rental rates and challenging the contract rental the landlord couldn’t justify.

I see this constantly with:

• Franchisors expanding quickly — delegating lease reviews to whoever has a spare hour, only to discover franchisees are locked into unfavourable terms
• First-time tenants — excited to “finally become a business owner”, then terrified they’ve committed to something they don’t fully understand
• Experienced operators — confident in their business but outgunned by professional landlords who do this daily

The pattern is always the same: underestimating lease complexity leads to years of unnecessary costs.

But here’s the shift…

The danger isn’t the lease itself. It’s going into it blind.

When you understand your true obligations, the hidden cost drivers, and your negotiation levers before you sign… a lease stops being dangerous. It becomes a strategic asset.

Here’s the question I’d ask you over coffee

“Would you sign a six-year supply contract without reviewing every cost and risk?” Of course not.

But that’s exactly what most tenants do with leases, often the single most expensive contract in their business.

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Marcus Bosch is Managing Director of Proactive Property Group. Marcus helps commercial tenants find the right premises, negotiate better lease terms leases, and reduce occupancy costs— so your business is protected and profitable.

www.proactivegroup.co.nz