A confession of judgment clause is one of the most dangerous provisions a franchisee can agree to in a commercial lease. It allows the landlord to obtain a court judgment against you without filing a lawsuit, without giving you notice, and without any opportunity to defend yourself. If you are signing a commercial lease for a franchise location, understanding what this clause means, and whether it can be negotiated, is critical. At Lopes Law LLC, we regularly review commercial leases for franchise clients and negotiate to remove or limit confession of judgment provisions.

Many franchisees focus their legal attention on the franchise agreement and the FDD, which is important, but overlook the commercial lease entirely. The lease is often the second-largest financial commitment in a franchise deal. A 10-year lease with monthly rent of $5,000 to $15,000 represents a total obligation of $600,000 to $1.8 million. The terms of that lease deserve the same careful review as the franchise agreement itself.

What Is a Confession of Judgment Clause?

A confession of judgment (sometimes called a “cognovit” clause) is a contractual provision where the tenant agrees in advance that, if a default occurs, the landlord can go directly to court and obtain a judgment without the usual legal process. The tenant waives their right to be notified of the legal action, to appear in court, and to present a defense before the judgment is entered.

In practical terms, here is what happens when a confession of judgment clause is triggered:

1. The landlord claims the tenant is in default (missed rent, breach of a lease condition, or other trigger)
2. The landlord’s attorney files a complaint with an attached affidavit referencing the confession of judgment clause
3. The court enters a judgment against the tenant, often the same day
4. The landlord can immediately begin collection actions: garnishing bank accounts, placing liens on property, or pursuing eviction

The tenant typically learns about the judgment only after it has been entered. At that point, the legal burden shifts to the tenant to file a petition to open or strike the judgment, which requires proving a meritorious defense and often involves significant legal costs.

Why Do Landlords Include Confession of Judgment Clauses?

From the landlord’s perspective, confession of judgment clauses serve as a powerful risk management tool. They provide immediate legal recourse if a tenant defaults, without the time and expense of a traditional lawsuit. In a normal eviction proceeding, the landlord must file a complaint, serve the tenant, wait for a response, and potentially go through months of litigation before obtaining a judgment. A confession of judgment compresses that timeline to days.

Landlords in states where these clauses are enforceable often include them as standard language in their lease templates. Many tenants, especially first-time franchise operators, sign without fully understanding the implications. At Lopes Law LLC, we have seen cases where franchisees did not know the clause existed in their lease until the landlord exercised it.

Which States Allow Confession of Judgment in Commercial Leases?

The enforceability of confession of judgment clauses varies significantly by state. A few key patterns:

• Pennsylvania: Confession of judgment clauses are enforceable in commercial leases. Pennsylvania courts have a long history of upholding cognovit provisions, making this especially relevant for franchisees leasing space in Philadelphia, Pittsburgh, and other Pennsylvania markets. At Lopes Law LLC, our Philadelphia headquarters gives us deep familiarity with Pennsylvania’s approach to these clauses.
• Ohio: Cognovit notes and confession of judgment clauses are permitted in commercial contracts, though specific procedural requirements apply
• New Jersey: Generally does not enforce confession of judgment clauses in leases
• California: Confession of judgment clauses are void and unenforceable
• Illinois: Prohibited in most contexts
• Virginia: Cognovit clauses are not recognized

Even in states where these clauses are technically enforceable, courts may scrutinize them for fairness, particularly if the clause was buried in a lengthy lease, if the tenant was not separately advised of its existence, or if the landlord’s claimed default is questionable.

At Lopes Law LLC, we advise franchise clients on the specific enforceability rules in their state before they sign any commercial lease. This state-by-state analysis is part of the comprehensive legal review we provide for franchise transactions.

What Are the Specific Risks for Franchisees?

Confession of judgment clauses create layered risks for franchisees that go beyond the landlord-tenant relationship:

• Immediate loss of the franchise location: If the landlord obtains a judgment and proceeds with eviction, you could lose your physical location with little or no time to relocate. For franchisees who have invested $200,000 or more in buildout, equipment, and inventory, losing the location can destroy the entire investment.
• Franchise agreement default: Most franchise agreements require the franchisee to maintain a physical location. Losing your lease can trigger a default under the franchise agreement, leading to termination of the franchise and loss of your franchise fee, which is typically non-refundable.
• Personal liability: If you personally guaranteed the lease (which most landlords require), the confession of judgment gives the landlord immediate access to your personal assets, not just your business assets.
• Frozen bank accounts: In states like Pennsylvania, a landlord who obtains a confessed judgment can immediately freeze the tenant’s bank accounts through a writ of execution. This can halt your business operations entirely.
• Credit damage: A judgment on your record affects both your personal and business credit, making it harder to obtain financing for future business activities

How Can You Negotiate a Confession of Judgment Clause?

The best outcome is to have the clause removed entirely. However, if the landlord insists on keeping some form of expedited remedy, there are several compromise positions that significantly reduce your risk:

• Require prior written notice: Negotiate a provision that the landlord must give you written notice of the claimed default and a cure period (typically 10 to 30 days) before exercising the confession of judgment
• Limit triggering events: Restrict the clause to non-payment of rent only, excluding other lease defaults that may be more subjective or disputed
• Cap the judgment amount: Limit the confessed judgment to unpaid rent and fees actually due, rather than accelerating the entire remaining lease term
• Add a right to petition: Include language that the tenant has the right to petition to open the judgment within a specified timeframe without prejudice
• Separate acknowledgment: Require the confession of judgment clause to be in a separate document with a separate signature, ensuring the tenant is specifically aware of its existence

At Lopes Law LLC, we negotiate these modifications regularly for franchise clients. The success of the negotiation depends on market conditions, the tenant’s creditworthiness, and the landlord’s willingness to deviate from their standard lease template. In competitive markets where landlords have multiple prospective tenants, there is less negotiating leverage. In markets with higher vacancy rates, landlords are more willing to accommodate these requests.

What Should You Do If a Confession of Judgment Has Been Entered Against You?

If a landlord has already obtained a confessed judgment, you still have legal options, but you must act quickly. In most jurisdictions that permit confession of judgment, tenants can file a petition to open or strike the judgment. To succeed, you typically need to demonstrate:

• A meritorious defense to the underlying claim (for example, that you were not actually in default, or that the landlord failed to comply with lease requirements)
• That you acted promptly upon learning of the judgment
• That striking or opening the judgment would not cause undue prejudice to the landlord

At Lopes Law LLC, our Franchise Dispute Review is available at $3,000 flat for an initial assessment of your situation and legal options. If the dispute requires active representation, we discuss retainer arrangements based on the complexity of the matter.

Frequently Asked Questions About Confession of Judgment

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