Site Selection

If you have a telephone at any of your franchise locations, you are most likely being overcharged. If you have trash service at any of your franchise locations, you are probably paying more than you have to. If you pay for worker's compensation at any of your franchise locations, there are almost assuredly errors in the way your coverage was categorized. To put it more simply, if you have walls, doors, workers, and customers, the monthly bills you're getting are probably too high.

Recurring monthly expenses like phone, Internet, trash, and alarm services can be a wasteland of, well, waste...especially for owners of multiple franchise units. Multiple locations spread over even one metropolitan area most likely means separate service bills and contracts for each service at each location...

While franchisors typically supply name brand recognition, a proven business concept, and extensive franchisee training and ongoing support, most will not sufficiently help you with your site selection or commercial lease. Deciphering the lease agreement document (often 50 to 60 pages in length) and negotiating the best deal is often left up to you. And negotiating this against an experienced landlord or the landlord's broker can be a challenge. Knowledgeable real estate agents and brokers are specialized sales people. Their job is to sell franchise tenants on leasing their location at the highest possible rental rate.
Multi-unit franchisees may have a little leasing process experience - yet they have to negotiate against seasoned professionals who negotiate leases every day for a living...

Every commercial landlord wants national franchises and chain stores for tenants. They have name recognition and a proven track record in business. So when it comes to expanding your own operations and negotiating further leases, lead with your strengths. If you are opening a franchise location, you are automatically more desirable to a landlord. If you are opening your third, fifth, or tenth franchise location, you are even more attractive because you are proven successful! Here are three strategies to implement in your lease negotiations.

Multi-unit franchisee owners should be fully aware of the specific considerations relevant to small commercial site development prior to committing to a lease or property purchase. The challenge of fitting many required components onto a small parcel can be daunting, especially when considered in conjunction with evolving local ordinances and state regulations, which are on the rise. The best method of ensuring that the proposed site will work, and do so in the most efficient manner possible, is to apply rigorous due diligence in the development design process.

Parameters for successful development of small sites for development-ready outparcels versus stand-alone or freestanding sites have somewhat different requirements however, they do share a primary development goal...

A great franchise in a poor location will become a poor business. When it comes to site selection, one difference between an independent tenant and a franchisee is that, presumably, the franchisee will be getting real estate help and support from the franchisor. Whichever side of the coin you're on, here are some site selection tips for leasing commercial and retail space:

Potential franchisees should take a lesson from cautious pedestrians who look both ways before crossing the street. Before paying a substantial franchisee fee, you must be aware and understand that the franchisor may not, or simply won't, be able to handle every related detail for you.

Please don't get me wrong! I am a firm supporter of the franchising concept. There are many existing franchises which are very successful as they have a strong product/service as well as the right people in place. I have found, however, that many franchisors can often fall short in the area of real estate help (specifically in regards to site selecting and lease negotiating). Finding the right location is vital to a franchisee's success or failure...

Airport concessions may, at first glance, seem like a risky endeavor. Traffic has been steadily declining for a year - down nearly 12 percent in February 2009 when the FAA released its last traffic statistics - and the barrier to entry remains high.

But consider the upside. The largest U.S airports host an average of 60 million passengers each year. Not one U.S. air carrier offers their coach passengers breakfast, lunch, or dinner service on domestic flights. Locations offering healthy, fresh, portable options are limited, yet travelers often have hours to wait for delayed flights, missed connections, or - in the best case scenario - a shorter than average security wait time.

As multi-unit operators or franchise systems pursue options beyond traditional locations, how can they prepare themselves? Here's what I consider a good "check-in process...

It's hard to ignore the negative press about the economy, and it's almost impossible not to cringe at the mention of credit rates and loans. But (and there's always a but) the glass remains half full--or possibly even overflowing--for those lucky enough to be tenants in today's real estate market.

To gain some perspective on being a tenant in this economy, I interviewed one of the largest landlords in the country; a large Washington, D.C.,-based landlord; and a family that owns a few neighborhood shopping centers. To my surprise, I received a very candid response from each. All three confirmed that this is a terrible time to be a landlord, but a great time to be a tenant--and each told me ways they would be pushing the negotiation envelope in this market if they were tenants...

Technology tools have become a mainstay for every multi-unit franchisee, used for planning, budgeting, forecasting, and many other daily activities. Today franchisees are embracing technology for demographic research and site selection.

Multi-unit operators and franchisors alike are availing themselves of many sophisticated web-based applications and desktop programs that provide highly specific data on local, regional, and national demographics sliced to order in an increasing number of ways. For example, a quick-serve operator in Denver can gather many types of information about a potential site based on address, ZIP Code, drive time, or mile radius. This data can be combined with myriad customer data such as age groups, household income and expenditures--and all in a matter of minutes...

We all know to expect death and taxes, but tenants can add one more thing to that list: lease renewals.

A lease begins to expire the day it's signed. Yet, how often have you found yourself scrambling to negotiate a renewal in the last couple of months or weeks before the last day? If you're waiting until the last minute to make the critical decision about renewing, and on what terms, you're clearly not dealing from a position of strength.

What follows are several renewal strategies that will help you deal with your landlord from a position of strength. For the sake of clarity, we'll divide this into two sections: 1) terms and conditions to try to include in your original lease; and, 2) actions to be taken during the term of your lease...