When You Lease, Expect It!: New Tools Can Help Control And Manage Your Lease Agreements
The air conditioner at one of your Phoenix units has failed. The manager calls you and says it's so hot inside the store that customers are turning around and walking out. Your first thought is to call your local A/C repair business for what will most likely be a costly service call.
Did you know your lease agreement may include a clause that you are not liable for air conditioner repairs? With new web-based lease administration technology, you could know that--and every other nuance tucked away in your lease--and in a flash.
Most smaller franchisees simply file their lease away once it is signed. Now, a web-based support solution enables tenants to monitor lease portfolios, create comprehensive lease abstracts, and update all data as leases are amended and landlords change. This across-the-board access can allow franchisees to avoid costly mistakes in key functions such as contract dates, key lease clauses, cost allocations, reconciliation, and compliance issues.
This is exactly what Property Works, based in Decatur, Ga., offers franchise customers. Kimberly Finnegan, spokesperson for the company, says, "Often when a busy unit manager runs into a potential problem, her priority is to fix it and move on. The last thing a tenant wants to do is spend hours tracking down the lease and looking through the fine print. Yet by fixing the problem the franchisee may be jeopardizing future warranty protections."
The company's web-based tool, REport ms, contains a facilities management module that would have allowed the franchisee with the A/C problem to determine who was responsible for fixing it. By combining its software with the additional services of lease administration specialists who know where to find the savings in a lease, franchisees can save money and spend less time digging into their lease agreements.
Finnegan says it's not uncommon for tenants to realize thousands of recoverable dollars hidden away in the fine print of lease agreements. She says her company's web-based tools and lease management support services typically save clients--more than 25 different national brands--more than $125,000 cumulatively every month.
Wisconsin Hospitality Group is a Milwaukee-based multi-unit franchisee with 41 Applebee's and 82 Pizza Hut locations, and the company has been using lease administration technology for several years now.
"It's really like an electronic lease administrator," says Tim Randall, Wisconsin Hospitality Group's chief legal counsel. "We have a lot of properties and leases to track, and the system does the work and generates reports for us to review."
Randall says he can stay on top of tracking dates, option notice deadlines, and lease terms, among other lease-related items. "Being able to keep an eye on these contracts not only helps us know when a change in rent is coming, for example, but also helps us with respect to cash flow, audits, and other internal planning details."
Randall reviews weekly reports and can log into the system to generate reports anytime he wants. "It really takes the administration burden off us and allows us to stay up to date on every lease agreement with ease." After all, if your rent is due to increase at a location, you want to know that early. Armed with the best information, you can make the best decisions.
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