The Kase is a company selling cell phone cases. http://www.thekase.com/FR/site/index.html
Last year, The Kase could hight expand its turnover by opening new shops that were formerly operated by The Phone house. Kase indeed could use commercial rent legislation to develop its business in an efficient way.
According to the French commercial code, when a commercial lease is signed, the tenant can transmit its right to be a tenant to a third party. Thid cannot be refused by the landlord either if the tenant's business us sold too, or if the tenant company gets bankrupt. The new tenant must however perform an activity that is allowed by the lease contract. If not, the landlord can refuse or use his position in the negotiation to impose a higher price or more costly lease conditions.
When the cell phone distributor "The phone house" got bankrupt, the Kase offered to buy a number of leases. The shops were situated in very good commercial places. At this time however, following the entering of Free Mobile on the mobile market in France, all cell phone distributors were in a bad shape and none was therefore interested in buying The phone house.
Because the Kase sold phone cases, its activity was allowed by The phone house's leases. The Kase could therefore buy the right to operate in these shops for a low price without having to pay anything to landlords. This is one, even if it is not the only, reason why The Kase could quickly and successfull develop in France during the last two years.
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EDHEC BUSINESS SCHOOL
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