How to Review a Leased Property for a Franchise
How to Review a Leased Property for a Franchise
Whether you've decided to open a new business of your own or you'll be investing in a new franchise opportunity, the location plays a big part in the success of your business. Some franchises require the erection of a new building however many give you the opportunity to lease commercial space. If you're going to lease there are a number of points you should consider as you look for the ideal location.
Rent: Do your local research and ensure that the rent is fair. It's not uncommon to have some retail outlets fall into a higher price bracket - especially if they're new. Find out if the rent is comparable to the locations around the area.
Term: You may be hooked into a franchise opportunity that is a gold mine but sometimes the location doesn't pan out. Look over the agreements for favored locations to see if you can negotiate a short term lease option or if long-term is required.
Floor Area: As you look for franchise opportunities, most will have information on the ideal amount of square footage needed to successfully house the business. Consider this info when you're looking at ideal locations and comparing the amount of square footage available vs the overall cost.
Rental Increases: Determine if the properties you're looking at are leased out on a fixed rent or if the rent is based on the consumer price index. If it is based on CPI then try to negotiate to get a percentage cap in place.
Percentage Lease: Some landlords may ask for a fixed rate along with a percentage of sales. This needs to be negotiated and removed from the agreement - especially for a franchise.
Tenant Improvements: It's important to know what the property owner is responsible for not only in structural improvements but in getting the space prepared for occupancy: Flooring, walls, plumbing, HVAC, electrical, etc.
Provision for Expansion: Every business has the potential for growth, so check to see if the lease agreement offers provisions for expansion of your franchise where you can take over adjacent space. There may not be enough room to accommodate changes in size because of customer growth, necessary storage, etc.
Conflicting Business: Always try to negotiate a clause that keeps conflicting businesses out of the structure. While this may not be possible in a large shopping center or mall it's entirely possible if you will work within a plaza or strip mall.
There are a number of points within a lease that can affect how you do business and how well your franchise does in the local area. Take the time to review it carefully and work the details out in your favor. Remember, the landlord needs you a lot more than you need to be in that specific location. It's time to plan your holiday in Sardinia...and you four-legged pal is coming along! Blame Judges not Viewers for Pia's Exit on American Idol Caravanning from Melbourne to Alice Springs London brand is bound to be days in Singapore Shrinky's Guide to Work: The Exploited American Worker Ferretti Group announces the launch for the Custom Line at upcoming Festival de la Plaisance in Cannes The Travel Fad Landscape of the Moment Sandalwood Luxury Villas Sandalwood Villas Get a Travel IWC Watches for your travelling Sandalwood Luxury Villas American Barns-What you need to know! The bravura tourism at the dazzling place, Boise