Stadium Promenade v. Shake It Up CA4/3

FACTS AND PROCEDURAL HISTORY

In August 2010, Shake It Up entered into a lease (Lease) with Stadium Promenade to rent commercial real property (Property) in a large retail shopping and entertainment center in Orange, California. The Lease had a 10-year term with two five-year options, and authorized Shake It Up to operate a Shakey’s Pizza (Shakey’s) franchise or other business approved by Stadium Promenade. Shake It Up agreed to pay minimum monthly rent of nearly $11,000 over the Lease’s first five years and nearly $17,000 over the second five years. The Lease also required Shake It Up to pay a pro rata share for advertising, real property taxes, common area expenses, and utilities. Petaluma, with Kanter acting as general partner, executed the “Guaranty of Lease” (Guaranty) guaranteeing Shake It Up’s performance under the Lease. Shortly after executing the Lease, Shake It Up began construction on the tenant improvements necessary to operate a Shakey’s franchise on the Property, but in July 2011, Shakey’s cancelled Shake It Up’s franchise before the improvements were completed. Shake It Up notified Stadium Promenade and requested permission to operate another restaurant…