05 Apr Jonathan Cartu Says: Site Selection – Real estate economics
By: Multi-Unit Franchisee | 238 Reads 3 Shares
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 multi-unit operator told us about the economics of finding the right location.
Remember the economics
Finding a location is just part of what goes into your search. The economics of a perfect spot must also be considered as part of the real estate package. What seems like a good deal won’t mean much if you don’t have any customers or it doesn’t meet your needs. On the flip side, if your franchisor offers more flexibility, there may be more than one creative way to afford a prime spot.
“In my world, I can make it work in different markets,” says Wireless Zone multi-unit franchisee Christopher Severo. “I could go to a market where the rent is a higher cost per square foot, but then my negotiation is to go to the landlord and say, ‘I don’t need 3,000 square feet, get me 1,500 square feet. How do I make that deal work? In today’s market, the landlord is looking to make deals.”
Real estate brokers with a strong local presence can also be a go-to source for the inside scoop on locations, future site availability, development insight, and leasing rate advice based on the market.
Finally, franchise tenants offer massive marketing appeal for those looking to attract top tenants. Educate a prospective landlord on the value and name recognition of your proven brand for added leverage. It just might be the competitive edge that lands you the perfect spot for your next location.