As we pointed out last month, you could probably stand to beef up your real estate support for your franchisees. The most daunting task for a franchisee is often the one that comes right at the starting line: choosing a site. From restaurants, to traditional storefronts, to wellness centers, here are some tips designed to help you help them:
- Get an early start. The best location decisions are made with at least a six-month lead (and if it’s a relocation, you can double that). Owners may need several months to finalize their offer to lease, review legal documents and begin preparations for store build-out. Allowing a few months for the process also gives you as the franchisor time to consult with your franchisee and advise accordingly.
- Consider the source. Even the most well-intending real estate agent is working with his own commission in mind. Agents typically work for landlords who pay commission on closed lease deals. Some agents try and limit tenants’ searches to their own listings in effort to avoid splitting commission with another listing agent. Either way, no one knows your business better than you do, so be sure you have more of an influence on your franchisee than the third-party agent.
- Keep ‘em close to the vest. Just as you wouldn’t walk into a residential listing oooh-ing and ahh-ing within earshot of the listing agent, don’t express your every opinion during your site viewing either. Get as much information up front, before your appointment so you arrive informed. Play it coy when asked questions like your rental budget.
- Play the field. Before narrowing it down to just one site, begin negotiations on your top two or three. You never know when something may come into play that reshuffles your ranking order – and you can use the competing leases to fuel a tougher negotiation.
- Take off those rose-colored glasses. Don’t be too swayed by the promise of compelling anchor stores or other high-profile tenants in a shopping center. Remember that your individual unit and location is at least as important as the draw of the center itself. Property managers know this already – that’s why their lease rates within a given property can vary by as much as three times depending on traffic flow, space shape and quality of neighboring tenants. Be sure you know where your space ranks in the eyes of your owner.
If all goes to plan, you’ll soon be stopping by your franchisee’s site to offer a hearty handshake or hug on a location poised for retail success!
For more franchise real estate tips, visit fastcasual.com.
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