Operational

Continuous Operation Clause

A requirement that the tenant keep their business fully open, stocked, and staffed during standard operating hours for the entire lease term. Common in retail leases.

Extended Definition

Mall landlords rely on foot traffic from all tenants to support the retail ecosystem and drive percentage rent yields. A closed storefront damages neighboring businesses. Even if a tenant continues paying rent while keeping the doors shut, they are still in default under a continuous operation clause. Tenants often counter this by negotiating "co-tenancy clauses" that let them reduce rent or close if the mall's anchor tenant leaves.

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