Exclusive Use & Radius Restrictions: Retail Lease Clauses That Protect (or Limit) You

Retail leases often include two clauses that sound similar but work in opposite directions:

Exclusive use protects you by limiting who the landlord can lease to.
Radius restrictions protect the landlord by limiting where you can operate.

Both can materially affect revenue, expansion plans, and resale value of your business. This guide explains how these clauses work, common loopholes, and what tenant-friendly language looks like. (Not legal advice.)

Exclusive use: what it is and why it matters

An exclusive use clause says the landlord won’t lease other space in the center/building to a direct competitor—or to any business selling a defined category of products/services.

Examples:

a coffee shop wants protection from another espresso-focused cafe opening next door
a fitness studio wants protection from a similar studio in the same center
a specialty retailer wants protection from a similar concept drawing the same customers

Exclusive use clauses are most common in multi-tenant retail (shopping centers), but they can also show up in mixed-use buildings.

The #1 exclusive use pitfall: vague “use” definitions

If the lease’s permitted use is broad (“retail store”), exclusivity is hard to enforce. The landlord can argue a competitor has a different use.

Tenant-friendly exclusivity usually requires:

a specific use definition for your business
a list of prohibited uses for other tenants
clarity on what counts as a “competitor” (product mix, percentage of sales, etc.)

If you’re also negotiating assignment/sublease rights, think ahead: a narrow use clause can make it harder to sell your business (see /blog/assignment-sublease).

Common exclusivity loopholes tenants should close

Watch for carve-outs like:

“existing tenants are exempt” (fine, but verify who is already there)
“temporary tenants/kiosks are exempt”
“online sales are exempt” (could be irrelevant or very relevant depending on your category)

Also watch for enforcement mechanics:

Does the landlord have an obligation to enforce?
Do you have a remedy if the landlord doesn’t?

If the clause has no remedies, it can be “exclusive in name only.”

Tenant remedies for exclusivity breaches

Landlords usually resist strong remedies, but practical options include:

landlord must send enforcement notices to the violating tenant
rent abatement if the breach materially harms your business
a termination right if the breach is not cured within a defined period

If termination is too aggressive, try for:

abatement after X days, then termination after a longer period if uncured

Radius restrictions: what they are (and why tenants hate them)

A radius restriction prevents you (and sometimes your affiliates) from operating a similar business within a defined distance of the property for the lease term (and sometimes beyond).

Landlord rationale:

they want to protect tenant sales at the center
they want to maintain tenant mix and foot traffic

Tenant risk:

it can block expansion into a nearby higher-traffic area
it can reduce the value of your business if a buyer wants to open additional locations

Radius restriction red flags

Be cautious if the clause:

applies to “tenant and its affiliates” without defining affiliates
applies to “any business similar to tenant” without defining similarity
applies to e-commerce or delivery operations in a way that doesn’t make business sense
survives termination or assignment for a long tail period

Also watch for default consequences. Some leases treat a radius violation as a major default with accelerated remedies.

Tenant-friendly radius restriction negotiation ideas

If you can’t remove it, narrow it:

1) Reduce the radius distance

Smaller radius (e.g., 1 mile vs 5 miles) can preserve growth options.

2) Limit it to a defined “concept”

Tie it to:

your brand name, and/or
a clearly defined product/service category

3) Carve out existing and future business plans

If you already have (or plan) another location, disclose it and carve it out explicitly.

4) End it when you assign the lease

If you sell the business or assign the lease, a radius restriction that continues can be a deal-killer. Push for:

termination of the radius restriction upon assignment with landlord consent

How BizLeaseCheck helps

BizLeaseCheck flags exclusivity and radius restriction language and highlights:

vague use definitions that undermine exclusivity
missing remedies and enforcement obligations
radius restrictions that are overly broad (affiliates, survival periods, undefined “competition”)

Upload a lease for a fast first-pass review:

/analyze

Not legal advice

This article is for informational purposes only and is not legal advice. Exclusive use and radius restrictions vary widely by market, property type, and tenant category. Use this as a checklist and consult qualified professionals for your situation.