The Keep-Open Clause: Harder to Enforce Than You Think
What happened
In 2024 Tesco agreed to licence roughly half its floor space (about 13,000 square feet) of its supermarket in Waterford to Choice Stores, a homeware retailer, for a ten-year term. The deal made commercial sense for Tesco: a busy homeware store alongside its supermarket would drive footfall and make the overall premises more attractive.
Choice Stores opened in September 2024. Within months it became clear that the location was not performing and the store was losing money. By December 2025 Choice Stores notified Tesco that it intended to close.
Tesco went to Court to seek an injunction compelling Choice Stores to continue trading while the dispute proceeded to a full trial. It argued that the licence agreement contained clear obligations requiring Choice Stores to keep the store open, actively trade, maintain stock and keep the premises in proper order.
On 28 April 2026, Ms. Justice Bolger of the High Court refused to grant an injunction. Her judgment is significant not just for the parties involved but for anyone who owns, develops or occupies commercial retail premises in Ireland.
What is a keep-open clause?
A keep-open clause is a standard feature of many commercial retail leases (although this case concerned a licence) obliging a tenant to keep their premises open for business during agreed hours, to actively trade, and often to maintain stock, fixtures and presentation standards. Landlords include them because an empty or dark unit damages the wider premises as it reduces footfall, affects the atmosphere for other tenants and can undermine the landlord's ability to attract future occupiers.
On paper, the clause looks robust. Enforcing it through the Courts has always been more complicated than landlords appreciate — and this judgment makes that difficulty clearer than ever.
What the Court decided — and why
The Judge accepted that Choice Stores appeared to be in breach of its keep-open obligations. But accepting that a breach has occurred is only the first consideration. The harder question was whether the Court should grant an injunction compelling the licensee to continue trading (at a loss) while the case awaits a full trial at some time in the future.
Ms. Justice Bolger refused the injunction sought by Tesco for two reasons.
First, the Judge was not satisfied that an order for specific performance of the licence agreement would be granted at trial and where that permanent remedy is unlikely to be available, the case for compelling the same outcome on an interlocutory basis falls away. The order sought to compel a business to keep its doors open, staff its premises, maintain stock and actively serve customers, is mandatory in nature, and Irish Courts apply a high bar before granting it. The judge found the legal authority in this area, both in Ireland and in the UK, to be consistent and clear - Courts are very reluctant to force a loss-making business to keep trading against its will.
Second, the Judge found that Tesco could be adequately compensated in damages. Choice Stores' own financial expert had already quantified the projected losses of the Waterford store through to the break option in 2028. The Judge held that the financial impact on Tesco, including any reputational harm or lost footfall, was calculable by comparing trading figures before and after Choice Stores' departure. Where losses can be measured and paid, an injunction is harder to justify.
What this means if you are a landlord or developer
A keep-open clause, however carefully worded, offers less protection than many landlords assume. Where a tenant is genuinely trading at a loss and wishes to close, the Courts are unlikely to force them to stay open. That said, it should be emphasized that these clauses are still enforceable and binding as the landlord can pursue damages for its breach at trial. The import of this Judgment is that the immediate, practical enforcement tool of an injunction is, in most cases, out of reach for landlords.
Whether the keep-open clause remains fit for purpose as the primary protection in a retail letting is a question this judgment raises and the answer will depend on the nature of the deal, the parties and the premises. Careful consideration should be given to these clauses when drafting leases/ licenses.
What this means if you are a tenant or licensee
If you are occupying retail premises under a licence or lease with a keep-open obligation and the location is not performing, this judgment offers some comfort but does not mean you can walk away from a premises without consequence. The contractual obligation to pay rent remains and the landlord can still pursue damages for breach of a keep open covenant. However, the prospect of being compelled to continue trading at a loss is now reduced.
The judgment also underlines the importance of keeping clear financial records that demonstrate the loss-making nature of the operation. If a landlord does seek an injunction, the strength of the financial evidence will be central to the outcome.
Practical consequences
The High Court has now firmly endorsed the principle, already well established in the UK, that public interest weighs against compelling businesses to trade at a loss. The keep-open clause is not worthless, but its value lies in the damages claim it supports rather than in keeping the lights on.
AMOSS LLP acted for Choice Stores in successfully opposing the injunction application.
