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It’s common for retail tenants to negotiate a kick-out right—that is, the right to terminate the lease in the first few years if its gross sales fall below or don’t reach a certain threshold. This right is especially important for tenants that are considering expanding into a new location. That’s because a kick-out right allows the tenant to close its store quickly—and cheaply—if the location isn’t profitable or other factors make the location or market in that area undesirable.
