In today's retail real estate, franchising groups in your city or town may be a good source of tenant opportunities. This means that franchising groups have special property needs related to future leases. In many cases, they will have standard leases to reflect these conditions of stay.
Therefore, if you are negotiating a lease with a franchise group tenant, please don't be surprised if they will lease the lease as they wish to suit your property and lease.
The leases they gave you need to be comprehensively reviewed and adjusted to include the normal terms and conditions that landlords want to use in their property.
In many cases, franchise tenants will bring advantages to retail properties. Some of these advantages are as follows:
- Brand name that attracts consumers or shoppers to buy property
- Standard business model that has been validated in other regions
- A batch has been in business and will be supported by an ongoing franchise group.
No franchise group likes to see their brand suffer in the hands of a poor retailer or tenant. In this way, they are very selective before engaging in lease discussions with potential business operators.
Whether the franchise group will be the lessee of the lease and will be the business operator of the lessee? There is no common rule here; in general, today's franchise groups will only cancel leases after the location to protect their brand penetration. Most other ordinary locations will be leased directly with the owners who have cancelled the franchise agreement.
Many leases involving a franchise group must match the duration of the franchise agreement that exists between the franchise group and the potential tenant. In essence, you cannot have nothing else.
For this reason, the landlord should be flexible in terms of lease duration and options terms so that an ideal match between the lease and the franchise agreement can be achieved.
So what other things might be special when it comes to leasing negotiations with franchise-type tenants? There may be many, but here are some of the major ones:
- The size of the award will be a standard to allow tenants to operate within the established franchise agreement.
- Stores or leasing brands need to meet the standards of the franchise image. The landlord should allow a consistent brand to be installed inside and around the property to attract suitable stores or lease customers. On this basis, the normal rules applicable to marketing materials inside and outside the property may need to be adjusted for franchise tenants.
- Franchise tenants and licensors will track sales figures so that they know the business is booming. This means that landlords should still request monthly sales data so that they know that real estate and leasing are moving toward common success. This point can be created in the lease file.
If the landlord is negotiating with a franchise-type tenant, the landlord should ensure that their interests are protected because they have a very good real estate lawyer representing the landlord's status and requirements as a lease. The leasing agent understands the leasing process, but the leasing company can add real value to the process and help create a good leasing document.
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Orignal From: Retail Store Tenant - Franchise Group is Real Estate Broker Real Opportunity
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