photo by yukiko Matsuoka via flickr

The coffee company uses exclusivity clauses to keep adjacent tenants from competing

Tim Nelson
February 07, 2018

For nearly 30 years, the “Arepa Lady” has been a street-food staple amid Queens’ famously cosmopolitan culinary scene. They’re on the verge of moving to a new brick-and-mortar location to serve up Colombian-style arepas, chuzos, and patacones, but there will be one glaring omission from the menu due to a pesky contract clause in a neighbor’s lease,Eater reports.

A nearby Starbucks store has a clause in its lease forbidding any restaurants occupying adjacent storefronts from selling coffee. According to Alejandro Osorio, son of the original “Arepa Lady” who now manages the restaurant with his wife Nelly Klinger, they’ll have to forgo selling coffee and tea in order to comply with the coffee conglomerate’s wishes. To compensate, they’re seeking a full beer, wine, and liquor license to keep thirsty customers satisfied. Final approval is still pending. 

This isn’t the first time a business has run up against the corporate buzzsaw that is Starbucks’ contract language. A mom and pop coffee shop sued Starbucks over its exclusivity clauses back in 2006, and a New Jersey shopping center had to exploit a legal loophole to keep Starbucks from blocking the lease of a McDonald’s that planned to sell coffee. 

Still, including a no-coffee clause in its contracts to fend off local businesses feels excessive, especially given how indirectly a Colombian restaurant not known for its coffee competes with Starbucks’ broad menu in the first place. In a boilerplate statement, all a Starbucks spokeswoman could say is that the chain’s Jackson Heights location is “one of many coffee options that customers can choose from in the neighborhood.” 

With a Starbucks seemingly on every corner in most major cities, one has to wonder how many real estate options its upstart competitors really have. Thankfully, Klinger says the Arepa Lady team won’t let the global coffee giant get them down: “It's a lot of issues to deal with but we're excited."

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