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There are challenges multi-unit franchisees face in site selection and leasing no matter what kind of market exists. Lease negotiations is an important constant for franchise growth and longevity. Identifying specific issues early in the process can provide powerful leverage to help establish and sustain success.
Earlier this year we interviewed several multi-unit franchisees and got their advice and best practices for site selection and lease negotiations. Here’s what one of them told us about negotiating leases.
“Right now, the market is great and you are going to get a lot more from a landlord today than you would have 10 years ago,” says Wireless Zone multi-unit franchisee Christopher Severo. “But as a franchisee who is focused on the bottom line, rent is very important. Not overpaying is very important.”
With 46 Wireless Zone stores in six Northeastern states, Severo is well-versed in the art of negotiation. The Stamford, Connecticut-based franchisee enters every lease negotiation with a framework for a flat-rate agreement, options, no guarantee, six months of free rent, and TI money to build out the space. If Severo can’t get that, he looks to lock in a 10-year lease.
“Go in with a structure in mind, but you have to be flexible,” he says. “If you are going to grow to a multi-unit level, you will deal with all different sizes and types of landlords. If you think you are going to get everything you want every time, you are going to lose a lot of deals. I’ve learned that through trial and error.”