Dollar Store and Discount Retail Space in Ontario: Exclusives, Radius, Loading and Co-Tenancy

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 18 October 2026 · 9 min read — what a dollar or discount store needs from a large unit, how exclusives, radius and co-tenancy clauses work, loading and Fire Code storage rules, and the licences to check.

Looking for dollar store space in Toronto or the GTA? Tell me what you need and I will send you units that fit, with the zoning and the lease checked before you commit.

What a dollar store needs from the unit

A dollar or discount store makes money on volume and turnover, so the space has to hold a lot of stock, move it onto the floor quickly and keep the rent per square foot low. That pushes these stores toward bigger units than the typical plaza shop, often a combined pair of units or a former anchor or grocery box. It also brings lease problems that a 1,200 square foot boutique never meets.

• A wide, open floor plate with few columns, so gondola runs and checkout lanes lay out cleanly.
• Ceiling height for tall shelving, plus clearance below sprinklers, which the Fire Code sets for storage areas.
• A stockroom sized for pallets of seasonal goods, with a receiving door that a truck can reach.
• Electrical capacity for bright lighting, coolers if you sell drinks or frozen food, and several POS lanes.
• Parking and visibility. Discount shoppers make quick trips, so a pylon sign position and parking close to the door matter more than storefront design.

Rent is usually quoted as net rent per square foot per year, plus additional rent (TMI) for taxes, maintenance and insurance. On a large unit the TMI line can be a big share of occupancy cost, so ask for the last two years of actual TMI, not just the budget.

Exclusive-use clauses: yours and everyone else's

An exclusive is a promise by the landlord not to lease other space in the plaza to a business selling what you sell. Dollar stores sit in the middle of this problem. Your product mix overlaps with a pharmacy, a grocery anchor, a party store, a convenience store, a pet store and a seasonal pop-up, and many of them will already hold exclusives.

Start by asking the landlord for a list of every existing exclusive and prohibited use in the centre. Then compare it with your planned categories. The usual fix is an incidental sales carve-out: you may sell an otherwise exclusive category as long as it stays below a set share of your floor area or sales, measured in a way both sides can check. Without it, a single pharmacy exclusive on “health and beauty aids” can take a whole aisle off your plan.

On your own exclusive, ask for protection against another dollar, discount variety or “everything under a price point” store as a primary use. Define the protected use by the store format, not a list of products, or the exclusive will catch the grocery anchor and the landlord will refuse it.

The legal backdrop changed in 2025. The Competition Bureau’s guidance on property controls, published June 4, 2025, says exclusivity clauses are only justified in limited circumstances, such as attracting a key tenant or protecting its investment. It looks at how long a clause lasts, its geographic scope and the range of products it restricts, and says clauses restricting competition at the lessor’s other properties are generally not justified. Expect landlords and their lawyers to push back on broad, long or multi-property exclusives. A tight, well-reasoned exclusive is easier to get and easier to defend.

Radius clauses

A radius clause stops the tenant from opening another store within a set distance of the plaza for some or all of the term. Landlords use them to protect their centre’s sales, especially where rent includes a percentage of sales. For a single-store operator they rarely bite. For a growing chain or a franchisee, they can block the second location you already had in mind.

• Keep the radius short and tied to the same trade name or format, not “any retail business”.
• Exclude stores you already operate, and any store acquired as part of a purchase of another business.
• Limit the remedy. Many radius clauses let the landlord add the new store’s sales to your percentage rent calculation. That is far less damaging than a right to terminate.
• If you are a franchisee, line the radius up with your franchise territory so the two documents don’t conflict.

Co-tenancy and the anchor problem

Dollar stores often depend on traffic from an anchor, usually a grocery store or a large pharmacy. A co-tenancy clause protects you if that traffic disappears.

• Opening co-tenancy: your obligation to open and pay full rent starts only when the named anchor, or a replacement of similar size and type, is open and operating.
• Operating co-tenancy: if the anchor goes dark or occupancy falls below an agreed level for a set period, you pay reduced rent. If it continues, you may terminate.
• Define “replacement” carefully. A grocery box turned into a self-storage facility or a place of worship does not drive the same daily trips.

Watch the interaction with a continuous operation covenant. Landlords often want the discount store open fixed hours for the whole term. If the anchor leaves, you want the right to reduce hours or go dark without being in default.

Licences, product rules and zoning

Toronto’s Chapter 545 does not list general merchandise retail as a licensed business. However, the City says a business that offers pre-packaged food or drink for consumption off-site needs a Take-out or Retail Food Establishment licence, under the framework updated on January 1, 2025. Most dollar stores sell snacks, candy and drinks, so most need it. Check the equivalent rules in Mississauga, Brampton, Vaughan or Markham before you open.

Two federal rules have a direct premises effect. Section 13 of the Canada Consumer Product Safety Act says retailers must keep documents showing who they bought each product from, and where and when they sold it. Those documents must be kept for six years after the end of the year they relate to, at the place of business in Canada or another prescribed place. Section 14 requires anyone who sells consumer products commercially to report a safety incident to Health Canada and their supplier within two days of becoming aware of it. Keep a filing system and a back-office computer in the stockroom from day one.

Toronto’s Zoning By-law 569-2013 defines a “Retail Store” as premises where goods are sold, rented or leased, which covers discount retail. The question on a large unit is more often the building than the use. A former grocery or industrial showroom may have site-specific zoning limits on retail floor area. If you are taking over a former warehouse or showroom, read my change of use guide. Moving from storage to mercantile occupancy can raise the hazard level and trigger a permit under section 10 of the Building Code Act.

Loading and receiving

Pallet deliveries from a distribution centre need a real receiving door, not the front entrance at 7 a.m. In Toronto, Zoning By-law 569-2013 (regulation 220.5.10.1) sets loading space requirements by the building’s retail floor area:

• No loading space required below 500 square metres.
• One Type “B” space from 500 to 1,999 square metres.
• Two Type “B” spaces from 2,000 to 4,999 square metres.

A Type “B” space must be at least 11.0 metres long, 3.5 metres wide and 4.0 metres high. These are building requirements the landlord has to meet, not rights you automatically get. In a multi-tenant plaza the loading area may be shared, time-restricted or simply too small for a 53-foot trailer. Ask how deliveries actually work, look at the grade, ask whether there is a dock or a dock leveller, and check whether residential neighbours limit delivery hours.

If you plan to run a small warehouse for several stores, that is a different premises question. My warehouse and industrial space guide covers it.

Fire Code, storage and the stockroom

Discount retail means a lot of combustible stock in cardboard, much of it plastic, plus aerosols. The Ontario Fire Code’s rules on indoor general storage in Subsection 3.2.2 apply to combustible goods on shelves and racks:

• An individual storage area cannot exceed 500 square metres in an unsprinklered building, or 1,000 square metres in a sprinklered one.
• Storage height in an unsprinklered building cannot exceed 4.5 metres. Storage over 6.4 metres needs a sprinkler system to NFPA 13 or an approved older system.
• Keep at least 457 mm between the top of the storage and sprinkler deflectors.

Aerosol products, such as air fresheners, spray paint and hair spray, have their own limits in Subsection 3.2.5 based on NFPA 30B classification. Ask your supplier for the classification and your fire protection consultant for the allowed quantity. And Article 2.4.1.1 says combustible materials cannot accumulate in a means of egress or service room. Boxes stacked in the exit corridor during a seasonal changeover are exactly what that rule is aimed at.

The lease clauses that matter for a dollar store

My use clause guide goes into exclusives, radius clauses and prohibited uses in more depth.

Deal-killers to check on a viewing

• An existing discount, pharmacy or grocery exclusive with no room for incidental sales.
• No usable receiving door, or a shared loading area that cannot take your delivery vehicle.
• Low ceilings, or an unsprinklered building that caps storage height.
• A failing anchor. Look at the anchor’s lease expiry, not just its sign.
• TMI that has jumped because of roof or parking lot work, and is likely to keep rising.
• Columns in the wrong places on a combined unit, which ruin aisle layout.

Many of the same checks apply to a convenience store or grocery store in the same plaza, which is often who holds the competing exclusive.

Where I fit

I help discount and dollar store operators across Toronto, Mississauga, Brampton, Vaughan and the rest of the GTA find larger units that actually work for receiving and storage. I read the exclusive schedule and the co-tenancy terms before anything is signed, and check zoning and loading for the specific building. If you are buying an existing store, my retail store valuation tool is a quick first read on price.

Frequently asked questions

Sources

• Competition Bureau Canada: Competitor property controls and the Competition Act — exclusivity clauses justified only in limited circumstances (June 2025)
• City of Toronto Zoning By-law 569-2013, Chapter 220 Loading Space Regulations — loading rates by retail GFA, Type B dimensions
• City of Toronto Zoning By-law 569-2013, Chapter 800 Definitions — Retail Store definition
• City of Toronto: Take-out or Retail Food Establishment licence — pre-packaged food sales require a licence
• Toronto Municipal Code Chapter 545, Licensing — list of licensed business categories
• Justice Laws: Canada Consumer Product Safety Act — s. 13 retailer records for six years; s. 14 incident reports within two days
• Ontario e-Laws: O. Reg. 213/07, Fire Code — 2.4.1.1 accumulation; 3.2.2 indoor storage limits; 3.2.5 aerosols
• Ontario e-Laws: Building Code Act, 1992 — s. 10 change of use permit

Related reading

• Convenience store premises in Ontario
• Grocery store premises in Ontario
• The commercial lease use clause
• Thrift and consignment store premises
• Warehouse and industrial space in Ontario
• Retail store valuation tool
• The use clause in a commercial lease