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Exclusive Use Provisions: Is a Burrito a type of Sandwich?

A spat about the proper way to interpret the word "sandwich" recently broke out.1 Typically, such an event would not be noteworthy. It has received more attention because the participants were Justice Antonin Scalia, an Associate Justice on the United States Supreme Court, and Judge Richard Posner, a Judge on the United States Court of Appeals for the Seventh Circuit.

Justice Scalia approved of another judge's use of a dictionary to conclude that "sandwich" means "two thin pieces of bread, usually buttered, with a thin layer (as of meat, cheese, or savory mixture) spread between them." Judge Posner countered that a sandwich need not have two slices of bread, citing the existence of open-faced sandwiches.

This Update does not definitively answer the sandwich question. Rather, it highlights the importance of clearly drafting the exclusivity provision of a retail lease—the clause that impacts both a tenant's right to use or not use the premises for certain purposes and a landlord's ability to sign leases with other tenants.

The case that gave rise to the great sandwich debate considered the following exclusivity provision:

Landlord agrees not to enter into a lease, occupancy agreement or license affecting space in the Shopping Center or consent to an amendment to an existing lease permitting use . . . for a bakery or restaurant reasonably expected to have annual sales of sandwiches greater than ten percent (10%) of its total sales.2

The landlord of a shopping center and the operator of a Panera Bread restaurant had negotiated the exclusivity provision when Panera Bread first went into the shopping center. About five years after they signed the lease, landlord entered into a lease with the operator of a Qdoba. The Panera operator believed that the landlord breached its exclusivity provision because sandwiches would be more than 10% of Qdoba's total sales. The landlord disagreed, noting that Qdoba would be selling tacos, burritos and quesadillas; not sandwiches. The court sided with the landlord. Based on the dictionary definition of sandwich, no breach of exclusivity provision would occur because Qdoba would not be selling sandwiches.

Did the operator of Panera think they would be the only fast-service restaurant in the shopping center? If so, either a term broader than sandwich should have been included in the exclusivity provision or the lease should have explicitly stated that a sandwich includes certain creations that are more than just two thin slices of bread with a thin layer between them.

In negotiating exclusivity provisions, the parties must strive to clearly identify the scope of exclusivity rights. The challenge is to then draft the exclusivity provision in a manner that will lead to a straightforward interpretation.

1 Richard A. Posner, The Incoherence of Antonin Scalia, The New Republic, August 24, 2012 (review of Antonin Scalia and Bryan A. Garner, Reading Law: The Interpretation of Legal Texts (2012))

White City Shopping Center, LP v. PR Restaurants, LLC, 21 Mass.L.Rptr. 565 (2006).

©2020 von Briesen & Roper, s.cNational Law Review, Volume III, Number 29



About this Author

Chris A. Jenny, von Briesen Roper Law Firm, Madison, Corporate, Real Estate and Family Estate Law Attorney

Chris A. Jenny is a Shareholder in the Madison office of von Briesen & Roper, s.c. He focuses his practice on representing business owners in a wide variety of niche markets to become more profitable while minimizing their risk and expenses. Chris’s practice has a heavy concentration in the real estate, construction, and information technology industries. This practical experience is a tremendous benefit to the contractors, suppliers, landlords, tenants and real estate developers he represents. Chris’s construction...

William West, von Briesen Roper Law Firm, Milwaukee, Corporate and Real Estate Law Attorney

Bill West is a Shareholder. He Chairs the Firm’s Business Section and the Firm’s Mergers & Acquisitions Section.

Bill is a trusted advisor to his clients and they rely on his ability to achieve desired outcomes in a practical, timely and cost-effective manner – in other words, he gets things done. He has over 30 years of experience in corporate and business related transactions including:

  • Mergers and acquisitions

  • Complex corporate and commercial transactions

  • Corporate governance and business counseling

  • Business formation, strategy and structure

  • Business succession planning

  • Commercial real estate

Bill’s clients are involved in a range of industries, and include public and privately held businesses engaged in a wide variety of domestic and international transactions including asset and equity acquisitions, mergers, reorganizations, divestitures and restructurings.

Bill is also co-chair of the firm’s Retail Real Estate section. He represents clients nationwide in the purchase and sale of commercial real estate. Bill has a national practice handling the retail real estate leasing needs of both tenants and landlords.

Bill is a member of the American Bar Association (member of the Business Law, Real Estate and Taxation sections), and the State Bar of Wisconsin. He is also a co-author of LLCs and LLPs: A Wisconsin Handbook, 1st, 2nd and 3rd Editions, published by the State Bar of Wisconsin.

Bill is recognized by The Best Lawyers in America® as “Lawyer of the Year” for Closely Held Companies and Family Businesses Law in Milwaukee (2017). He is listed in The Best Lawyers in America® for Business Organizations (including LLCs and Partnerships) (2015-2018) as well as Closely Held Companies and Family Businesses Law (2014-2018).

Bill served as Chair and a member of the Board of Directors of Catholic Memorial High School.

James Wawrzyn, von Briesen Roper Law Firm, Milwaukee and Waukesha, Corporate and Healhcare Law Attorney

James Wawrzyn counsels clients on commercial contract negotiation, mergers and acquisitions, supply-chain alternatives, and general corporate matters. James collaborates with clients to identify and implement their priorities. For each project, James has a results-oriented approach. He continuously engages the stakeholders to recognize and actively address obstacles to finalizing priority items.

James is skilled in the preparation and negotiation of technology-based agreements such as master services, development and licensing...