Site Selection Addendum

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

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

Quick Start

1. Gather underlying agreement, party details, and site requirements.
2. Draft addendum sections in order: Preamble → Recitals → Criteria → Process → Conditions → Reps → Economics → Dispute Resolution → Boilerplate.
3. Mirror all defined terms and formatting from the base agreement.
4. Flag approval standard (sole discretion vs. reasonableness) for client decision.
5. 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

3. Site Selection Criteria

Draft objective, measurable standards:

4. Selection Process & Timeline

Sequential process with concrete deadlines:

1. Site identification — who may propose sites (landlord/seller, tenant/buyer, or both)
2. Proposal requirements — legal description, survey, preliminary title, rent/price terms, criteria compliance
3. Submission deadline — [30/60] days from effective date
4. Evaluation period — [X] business days to approve, reject, or request information
5. Approval standard — sole discretion / reasonableness / articulated grounds
6. Final selection deadline — whether time is of the essence
7. 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.

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.