Site Selection Addendum

Drafts an addendum to an existing franchise real estate agreement establishing objective site selection criteria, a sequential approval process, and binding conditions precedent.

Prerequisites

Underlying agreement — executed copy with defined terms, party designations, execution date, prior amendments
Party information — exact legal names, entity types, formation states, addresses matching base contract
Business requirements — intended use, operational needs, expansion plans, demographics
Site preferences — geographic targets, square footage range, physical specs, infrastructure needs
Transaction context — prior correspondence, discussed criteria, deadlines, financial parameters

Quick Start

Gather underlying agreement, party details, and site requirements.
Draft addendum sections in order: Preamble → Recitals → Criteria → Process → Conditions → Reps → Economics → Dispute Resolution → Boilerplate.
Mirror all defined terms and formatting from the base agreement.
Flag approval standard (sole discretion vs. reasonableness) for client decision.
Verify cross-references, defined term consistency, and numbering before finalizing.

Output Structure

1. Preamble & Parties

Match party names, entity types, and addresses exactly as in underlying agreement
Include guarantors, property managers, or affiliates if relevant
Verify signatory authority for entity parties

2. Recitals

| Element | Content | |---|---| | Agreement reference | Full title, execution date, all parties as designated | | Purpose | Site selection matters not addressed in base contract | | Business context | Operational needs, market factors justifying criteria | | Prior amendments | Reference prior amendments in sequence |

3. Site Selection Criteria

Draft objective, measurable standards:

| Category | Specifications | |---|---| | Geography | Cities, submarkets, corridors; proximity to highways, transit, customer concentrations | | Size | Min/max square footage with variance flexibility | | Physical | Ceiling height, column spacing, floor load, loading docks, truck court, parking ratios | | Infrastructure | Power capacity, HVAC, telecom | | Zoning | Permitted use alignment; as-of-right vs. CUP/variance willingness | | Visibility/Access | ADA compliance, signage, thoroughfare visibility, co-tenancy |

4. Selection Process & Timeline

Sequential process with concrete deadlines:

Site identification — who may propose sites (landlord/seller, tenant/buyer, or both)
Proposal requirements — legal description, survey, preliminary title, rent/price terms, criteria compliance
Submission deadline — [30/60] days from effective date
Evaluation period — [X] business days to approve, reject, or request information
Approval standard — sole discretion / reasonableness / articulated grounds
Final selection deadline — whether time is of the essence
Failure consequences — termination rights, extension options, liquidated damages

Include inspection provisions: access rights, scope, notice, owner presence, feasibility study cost allocation.

5. Conditions Precedent

For each: specify responsible party, expense allocation, deadline, and failure consequences.

| Condition | Key Terms | |---|---| | Environmental | Phase I ESA timeline, acceptability standards, Phase II trigger, remediation costs | | Property condition | Systems/structural/roofing/parking inspection; acceptable standard or repair/credit | | Survey | ALTA survey, required items, encroachment/boundary resolution | | Title | Commitment timeline, acceptable standard, defect cure, permitted exceptions | | Financing | Loan amount, rate parameters, commitment deadline, appraisal, failure consequences | | Governmental | Zoning verification, special use permits, CO, building permits |

6. Representations & Warranties

Property owner represents:

Good and marketable title (subject to permitted exceptions)
No undisclosed material defects, code/zoning violations, or environmental violations
Intended use permitted under current zoning

Tenant/buyer represents:

Authority to execute; organizational approvals obtained
Financial capacity to perform

Specify survival period and breach remedies (indemnification, termination, damages).

7. Economic Terms

Rent/price adjustments based on selected site characteristics
TI allowance or construction obligation variations by location
Formula for final pricing if base agreement contemplated a range
Security deposit / LOC / earnest money: amount, timing, forfeiture conditions, return terms

8. Governing Law & Dispute Resolution

Governing law: align with underlying agreement unless site location dictates otherwise
Resolution sequence: negotiation → mediation → arbitration/litigation
If arbitration: administering org (AAA/JAMS), rules, arbitrator count, location
Prevailing party fee-shifting; consent to jurisdiction; venue designation
Consider jury trial waiver

9. Boilerplate & Signature

Modification scope — identify base agreement provisions modified/supplemented/superseded
Ratification — unmodified terms remain in full force
Integration — base agreement + amendments = entire agreement
Counterparts — electronic/facsimile signatures valid
Amendment sequencing — number appropriately if multiple amendments exist

Signature blocks: entity name, "By:" line, printed name, title, "duly authorized" language, date. Add witness/notary lines if required by jurisdiction or if underlying agreement was notarized.

Guidelines

Mirror all defined terms, formatting, and structure from the underlying agreement
Do not introduce defined terms that conflict with the base agreement
Flag provisions where party instructions conflict with base agreement terms
Scope environmental representations carefully — avoid unqualified "clean site" warranties without factual basis
Approval standard (sole discretion vs. reasonableness) is a key negotiation point — draft per client instruction or flag for decision
If jurisdiction requires notarization or recording, confirm compliance

Troubleshooting

Conflicting defined terms: Cross-check every capitalized term against the base agreement glossary before introducing new definitions.

Unclear approval standard: Default to flagging for client decision rather than assuming sole discretion or reasonableness.

Missing environmental baseline: Do not draft unqualified environmental representations; require Phase I ESA results before committing to warranty language.

Multiple prior amendments: Verify amendment numbering sequence and confirm no superseded provisions are inadvertently revived.