Restaurant commercial lease in France 2026: key money, lease right and accounting

For a restaurant, the commercial lease is no legal footnote: it is often the most valuable asset on the balance sheet and the most structuring cost in the P&L. A good location with a controlled rent creates the value of the business; a fragile lease can destroy an otherwise profitable project. This is the complete guide to the restaurant commercial lease in France for 2026: lease right (droit au bail), key money (pas-de-porte), accounting treatment, rent indexation and the clauses that carry real risk.

The commercial lease is governed by articles L145-1 et seq. of the French Commercial Code (Code de commerce). Its minimum term is 9 years, with a tenant break option at the end of each three-year period — giving rise to the familiar shorthand "3-6-9". This statutory framework strongly protects the commercial tenant, most notably through the right to renewal (droit au renouvellement): when the lease expires, a landlord who refuses renewal is in principle required to pay an eviction indemnity (indemnité d'éviction), which can be substantial.

For a restaurant, several points of the lease are particularly decisive:

• the permitted use (destination des locaux): the catering activity must be expressly authorised, including extraction of cooking fumes and any terrace;
• the allocation of service charges and works between landlord and tenant;
• the renewal conditions and rent indexation mechanism;
• the change-of-use clauses (déspécialisation, allowing a change of activity) and the assignment clauses (cession, allowing the lease to be transferred with the business).

This is the most common source of confusion in restaurant files, and it has direct accounting and tax consequences.

The lease right (droit au bail) is the sum paid to the outgoing tenant to take over their lease. It is purchased because the existing lease is advantageous — a below-market rent, a prime location, favourable terms. It is the price of continuity of an attractive lease position.

Key money (pas-de-porte, also called droit d'entrée) is paid to the landlord, on entry into the premises, when a brand-new lease is concluded. Its legal nature is ambivalent: it may be analysed either as prepaid additional rent or as an indemnity (consideration for a commercial advantage, comparable in substance to a lease right).

This distinction directly governs the accounting and tax treatment.

The treatment differs depending on the precise nature of the payment:

• the lease right is recorded as an intangible fixed asset (account 206) and is not depreciable: its value is not deemed to decline mechanically over time. It may, however, be subject to an impairment charge (dépréciation) if the location loses commercial attractiveness;
• key money follows its legal qualification: if it constitutes additional rent, it is deducted as an expense spread over the duration of the lease; if it represents an indemnity comparable to a permanent entry right, it is capitalised as an intangible asset and is not depreciable.

The wording of the lease and the intentions of the parties are therefore decisive: the same payment can be either a deductible expense or a non-depreciable asset depending on how it is qualified. This is a point we secure systematically at the time of entry into premises or acquisition — see our article on acquiring a restaurant business.

Commercial rent is revised in accordance with the index stipulated in the lease, most commonly the commercial rent index (indice des loyers commerciaux — ILC) published by INSEE. The three-year review mechanism and statutory capping (plafonnement) frame the permitted increases, with the exception of de-capping cases (déplafonnement) — which arise, for example, when the lease term exceeds 9 years, when the commercial characteristics of the location have materially changed, or when the activity has been substantially modified.

For a restaurant, tracking indexation has two practical purposes:

• avoiding paying an incorrect indexation — landlords sometimes apply the wrong index or the wrong base figure;
• anticipating the resulting rent increases in the cash-flow plan, since rent is a heavy fixed charge (the sector target is below 8 to 10% of net revenue).

Beyond the rent itself, certain clauses make the lease either valuable or a trap:

• the permitted-use clause (clause de destination): if drawn too narrowly, it prevents any broadening of the activity — adding delivery, a terrace, or a bar — without the landlord's prior consent;
• the assignment clause (clause de cession): it governs the conditions for selling the business; a landlord-approval requirement (clause d'agrément) can significantly complicate an exit;
• the allocation of major structural works (article 606 of the Civil Code): a lease that places major repairs on the tenant represents a major financial risk;
• the joint-guarantee clause on assignment (clause de garantie solidaire): in the event of a sale, the outgoing tenant may remain jointly liable for the buyer's rent for a specified period.

Reading these clauses before signing or taking over a business avoids hidden costs that frequently exceed the price of the business itself.

A restaurateur had paid €60,000 in "key money" on entry into premises, and the accountant had expensed the full amount in the year of payment. On analysis of the lease, the payment in fact represented consideration for a permanent entry right — in other words, a non-depreciable intangible asset, not an expense. The correction avoided a tax reassessment for improperly deducted charges and resulted in the amount being correctly recorded as an asset on the balance sheet. In a separate file, the reverse applied: a payment properly qualified as additional rent was deducted and spread over the lease term. Same label, opposite treatment — the qualification is everything.

In the restaurant sector, rent is a fixed, incompressible cost: it falls due whether the restaurant serves fifty covers or none. This is precisely why the industry uses a target ratio: rent must not exceed 8 to 10% of net revenue (CA HT). Beyond that level, the net margin — already structurally thin by nature (see our article on restaurant profitability) — is fundamentally compromised.

This ratio must be calculated on the full occupancy cost: base rent, service-charge provisions (water, maintenance of common areas), property tax (taxe foncière) if recharged, and any separate signage fee. The headline rent alone is not sufficient.

Illustrative example — figures to be adapted to your own situation:

This table illustrates a key point: a rent is not cheap or expensive in absolute terms, only relative to the revenue it generates. A monthly rent of €4,500 can represent good value for a restaurant turning over €700,000 per year; it can be a dead end for one turning over €300,000. Lease analysis must always incorporate a realistic revenue forecast — not the optimistic scenario.

When advising on an entry into premises or an acquisition, we systematically reconstruct this ratio across three revenue scenarios (downside, central, upside) before any decision is made.

The end of the lease is a risk moment that is frequently underestimated. At the 9-year term, two outcomes are possible.

First scenario: the landlord renews. Rent may then be revised to market rental value (valeur locative), which may be significantly above the rent as indexed over the preceding years. The law frames the de-capping mechanism, but certain situations permit freer revision — notably where the lease term has exceeded 9 years, where the commercial characteristics of the location have materially changed, or where there has been a substantial change in the activity. An unanticipated renewal can result in a meaningful rent shock.

Second scenario: the landlord refuses renewal. In that case, the landlord must in principle pay an eviction indemnity (indemnité d'éviction) that compensates for the loss of the business (fonds de commerce). Under case law, this indemnity can reach several years of revenue — it is intended to cover the value of the goodwill, relocation costs, and trading disruption. In practice, the calculation gives rise to adversarial expert reports and lengthy disputes.

What this means in practice:

• Open renewal negotiations 12 to 18 months before expiry — the required notice period is 6 months — to avoid being forced to accept the landlord's terms;
• Have de-capping clauses analysed before agreeing to a lease exceeding 9 years or accepting an extension;
• Build into the medium-term cash plan a provision for the risk of a significant rent increase at renewal — this is a real financial risk, not merely a legal one.

In one file followed by the cabinet, the landlord was applying the ILC by taking as the calculation base not the most recently revised rent, but the rent at the start of the lease — effectively failing to compound successive revisions. The error, which in this case was in the tenant's favour, had not been corrected for five years. When the landlord sought retrospective regularisation, the questions of limitation and tacit acceptance of past revisions arose. The reverse situation also occurs: landlords have applied incorrect indices that resulted in inflated rents, paid without challenge for years. In either direction, an annual review of the indexation — checking the index, the base figure, and whether capping applies — prevents these accumulations. This is a control we carry out at every year-end close for restaurant files under mandate.

For a restaurant, the commercial lease is simultaneously an asset (the lease right) and a structuring cost (the rent). Distinguish between the lease right (non-depreciable intangible asset) and key money (either an expense or an asset, depending on its qualification), monitor the ILC indexation, and read the sensitive clauses (permitted use, assignment, major works) before signing. A wrong accounting treatment or a misread clause typically costs far more than the lease itself.

To secure your lease and its accounting treatment, see our restaurant accounting support page. See also the complete 2026 restaurant accounting guide.

Updated 3 June 2026. This article presents the general principles of the commercial lease in the restaurant sector; the qualification of key money and the accounting treatment depend on the wording of the lease and your specific circumstances. Sources: Code de commerce, Service-public.fr, BOFiP, INSEE.