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

| 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:

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.

| 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.