Step 2: Leasing Your Shop
What to Look For, and What to Ask
Google will tell you that a retail lease is “a legally binding agreement where a landlord (lessor) grants a tenant (lessee) the right to occupy business premises for the purpose of selling goods or providing services to the public.” But that’s just the headline.
In reality, your lease is one of the biggest commitments you’ll make — financially, legally, and operationally. And unlike your branding or your fitout, it’s not something you can easily change down the track.
This step will help you lease your shop with confidence — from understanding the fine print, to figuring out what kind of space you actually need, to asking the right questions before you sign.
By the end of this step, you’ll:
– Understand the key parts of a lease agreement
– Know how to define your ideal tenancy
– Be ready to speak with agents or landlords with clarity and purpose
Let’s Talk About the Lease:
Most shop leases run for a minimum of 3 years, and they all include conditions that affect how your business can operate.
Understanding your lease terms early – before you dive into design, budgeting or fitout planning – can save you a lot of backtracking later.
Many of the terms you’ll come across are negotiable, especially in the early stages. Knowing what’s on the table (and where you can push back) gives you far more control over the whole leasing process.
- Lease term – length of agreement and renewal options
- Rent and outgoings – what’s included, and what’s not
- Rent increases – how often rent will go up (usually annually), and how it’s calculated (CPI or fixed %)
- Turnover rent – some leases include an extra rent component based on your sales — this is more common in shopping centres
- Incentives – such as rent-free periods or landlord contributions
Fitout clauses – approvals and rules for modifying the space
Make good – what needs to be restored at the end
Permitted use + exclusivity – what your shop is allowed to do, and whether similar businesses are allowed nearby
And here’s something that’s non-negotiable:
Always have your lease reviewed by a lawyer who specialises in retail tenancy law.
Not a general solicitor — you want someone who knows the ins and outs of commercial leases in your state or territory. It’s worth every dollar.
Before you start scrolling through listings or calling agents, stop for a moment and get clear on what you’re really looking for in a shop.
It’s easy to fall in love with a cute little space and start picturing your branding on the window. But unless you’ve taken the time to think through your actual business needs — space, layout, access, fitout requirements — you could end up signing a lease that doesn’t support how you want to trade.
Some things to consider:
Do you want a street-facing shop, a shopping centre tenancy, or something a little more tucked away?
How many square metres do you actually need?
What kind of layout will work for your products, team, and customer flow?
Do you need storage, change rooms, office space, or bin access?
Is parking important? Public transport? Visibility? Foot traffic?
What’s non-negotiable, and what’s a nice-to-have?
Getting clear on this now will save you time, money, and backtracking later — and it makes conversations with leasing agents a whole lot easier too.
If you want to learn more about defining what kind of space suits your business,
start with this practical read: “How to choose the right retail shop.”
It breaks down the process and helps you create your own Property Brief — no real estate experience required.
So you’ve found a space that ticks a few boxes — great. But before you sign anything, it’s time to slow down and ask the right questions. These aren’t just nice-to-knows — they’re the difference between a smooth setup and some very expensive surprises.
What’s the landlord responsible for – and what are you? This applies both during the build and after you’re open.
Are there any hidden clauses? Watch for relocation clauses, early termination rules, and no-compete terms. this is where your lawyer will earn their fee.
Can you negotiate the timeline? Don’t agree to an opening date before you’ve mapped out your whole design & fitout program.
Are there any restrictions on what kind of business can trade there? Check the “permitted use” clause – it can limit how you operate or expand.
What’s the landlord’s process for approving a fitout? Some are flexible, some are fussy – you need to know upfront.
What incentives are available? Ask about rent-free periods or landlord contributions — especially if the space needs work.
What are the rules on signage, design, and opening hours? Many centres and landlords have strict guidelines. Get them early and make sure they work for you.
You can read more in this blog: Retail Lease Checklist: What Every Shop Owner Should Know Before Signing – Setting Up Your Shop
It includes a link to a free Retail Lease Checklist. Easy to print, take to inspections, or share with your solicitor.
⚖️ One last thing — and it’s important.
The guidance in this step is general only and doesn’t replace professional advice. Before you sign a lease, make sure you speak to a qualified lawyer who specialises in retail or commercial leasing. It’s a small upfront investment that could save you serious stress, cost, and complexity later on.