ASHEVILLE - A company that operates an Asheville restaurant says in a court filing that its landlord is illegally terminating the lease to sell the property to a hotel developer.
FW of Knoxville 1, a limited liability corporation based in Knoxville, operates First Watch, which opened in Biltmore Village in 2022, but closed indefinitely after Tropical Storm Helene decimated the area Sept. 27, 2024.
FW of Knoxville filed a complaint Aug. 28 against its landlord, NP DPA Biltmore Station, a Chicago-based real estate company.
Valerie Bolar, a representative for FW of Knoxville, declined to comment. Biltmore Station representatives did not immediately return a call from the Citizen Times Sept. 3.
The lawsuit states First Watch entered into a lease agreement
with the previous owner of the property, Roosevelt Gardens Shopping Center LLC, in December 2020. The lease term was for 10 ½ years, with the initial rent being $8,622 per month. FW of Knoxville invested $1.5 million of its own capital in development costs for the restaurant, according to the lawsuit.
Prior to Tropical Storm Helene, the restaurant generated approximately $320,000 in annual earnings, according to the court filing.
FW of Knoxville received notice in January 2023 that Biltmore Station had purchased the property and assumed the lease, the lawsuit states.
The lawsuit alleges that after Helene struck, its landlord continued to operate under the terms of the lease until July 2026. On July 29, 2026 and again on Aug. 10, 2026, Biltmore Station tried to terminate the lease agreement, but a provision in the lease dictates that the landlord must declare damage to the property unrepairable within 90 days of the damage occurring, according to the lawsuit. That provision was not exercised by Dec. 26, 2024, 90 days after Helene, the lawsuit states.
Rather, after Helene, the landlord through its property manager communicated with FW of Knoxville about the status of the property, including floodplain discussions with the city of Asheville and issues related to raising the parking lot elevation, leading the company to believe that the lease would be honored and the property restored, according to the lawsuit.
FW of Knoxville relied on those communications to make business decisions, staying at that location and not working to secure a new one, according to the lawsuit.
After receiving the termination notice, the First Watch franchisor moved to terminate the company's franchise agreement, the lawsuit states.
The lawsuit says that because it waited so long to try to terminate the lease, Biltmore Station waived its termination rights. The lawsuit further states that Biltmore Station only decided to terminate the lease after it entered into an agreement to sell the property to a hotel developer.
The lawsuit asks for a judgement upholding the lease agreement and an unspecified amount of damages.
In a subsequent motion, FW of Knoxville also asked for a restraining order and a preliminary injunction suspending the effect of the lease termination notices while a judge decides if they are valid and barring the sale of the property to a third party in a manner that would affect First Watch's lease.
Kara Fohner is the Public Safety Reporter for the Asheville Citizen Times. Email her at kfohner@usatodayco.com or call her at 980-241-8671.
This article originally appeared on Asheville Citizen Times: First Watch in Biltmore Village fights to save its lease
