May 22, 2009 // Franchising.com // San Diego, CA - During the current economic downturn, the Home Office of Annex Brands Inc. is helping its franchisees renegotiate store leases with landlords to reflect current market conditions. And the shipping and business services franchisor is seeing steady success with this plan.
"In most cases, the biggest monthly expense an owner will incur is the lease," said Franchise Placement Specialist Chris Kimball. "In light of the current economy, it's smart to take a look at all expenses to see where there might be opportunities for savings. Fortunately, retail rent is a lot more negotiable than it was a year ago, and landlords especially want to keep national brands like PostalAnnex+ from leaving their centers. So we're urging all of our franchisees to take advantage of our excellent relationships with landlords and get market adjustments where possible."
Across the nation, many commercial landlords say that rent concessions and discounting – even if temporary - are a common and practical move right now, in order to keep commercial space filled. Since the beginning of 2009, Annex Brands has successfully renegotiated nearly 40 leases, with an average reduction of 25% in lease payments. Kimball points out that the leases which were in consideration included those which were close to expiring, as well as those with high rent, given current property values. And while lease reduction is the major reason most franchisees seek out renegotiation assistance, there's the added benefit of the lease being extended for a long period of time. This ensures continued service in a community.
"No one is unaffected by this recession," Kimball continued. "But our franchisees provide local jobs and tax revenue. And both we and the landlords don't want to see those important services lost due to above-market rent. And it just makes good business sense for landlords to keep their retail spaces occupied by dedicated store owners."
Kimball believes the best way franchisees can help themselves is by being current on their lease obligations. "Landlords are much more willing to work with a tenant who has been 'low-maintenance.'" This includes not only paying monthly obligations but keeping a clean and professional storefront, reflecting well on the center's image.
While the franchise industry waits for help from financial institutions to create new businesses, jobs and tax revenue, Kimball is pleased to see current business owners and landlords working together to not just survive, but eventually thrive.
Annex Brands, Inc. is a franchisor of the PostalAnnex+, Handle With Care Packaging Store and Sunshine Pack & Ship brands. Formerly known as Postal Annex+, Inc, Annex Brands is headquartered in San Diego, California, where the company was founded in 1985. Its brands offer shipping and business services such as moving van, freight shipping, small parcel and overnight document delivery services, private mailbox rental, notary service, high-speed copying in black & white and color, office supplies, web site/e-commerce services, faxing service, printing, stationery, rubber address stamps, key duplication, greeting cards and assorted gift items, all in a convenient, service-oriented environment.