GET THE MOST OUT OF YOUR LEASE
- Ask the landlord for a two-month rent-free period at the beginning of the lease. Use this time to set up your store and to begin selling your wares.
- Find out how the landlord has measured the space in the store. Does the square footage include all the space in the store or has the landlord eliminated unusable space and obstructions from the measurement? Push to have the square footage exclude pillars, inconvenient corners and other unproductive space.
- Insert a clause into the contract that prohibits your landlord from moving the location of your store. If you don't, you may find yourself shuffled to the back end of the plaza, for example, if a bigger tenant decides they want to expand their space.
- Make sure a no-competition clause prevents your landlord from allowing competing stores to operate in your plaza, for example. Likewise, make sure the landlord clearly spells out what kinds of products you're not allowed to sell. If competition agreements with other tenants are going to hamstring you, perhaps it's a good idea to locate your store somewhere else.
More Tips
- Leases will always reflect the landlord's point of view. If a landlord is interested in getting a particular retailer into their mall, they may be willing to make concessions. If you have something the landlord wants, use this as leverage to add your needs to the lease. The market will also determine the value of the rental space and how far you can negotiate.
- Short-term leases are beneficial because they offer flexibility and mobility, but long-term leases provide more leeway during negotiations and predictability for your business.
- Push hard to have increases in rent spelled out in the contract. Put caps on how much rent can increase and ensure you have the right to sublet your space.
|
THAT LOCATION THING
Retail is all about that location thing. You know, location, location, location.
Whether you're opening a new store or looking to relocate an existing store to a better area, finding the right location requires research, money and planning.
Research each potential site before you sign the lease.
Find out what kind of traffic passes through the store and what kinds of people visit the location. Ask yourself if the traffic fits your target demographic. Don't forget to look at the surrounding neighbourhoods too. Neighbourhoods change and you need to decide if foreseeable changes to your community will help or hinder your business.
Compare prospective locations. You'll most likely have to pay more and sign a long-term lease to get a good location, but you'll also have the security of knowing you have a good location. Before you sign, compare the cost per square-foot at other locations to determine what's best for your business.
Hermann J. Kircher, Founder of Kircher Research Associates Ltd., says retailers interested in operating inside a mall should consider the commitment seriously.
"Fundamentally, the first question the retailer has to ask is, 'Why do I want to be in this mall?'" says Kircher.
Kircher says that when the costs of operating inside a mall and the returns are measured against non-mall locations, retailers will find that the two locations can generate the same return.
If you do want a location inside a mall, have a business plan ready. Looking for locations is sometimes like shopping your business. To get your store into a mall or onto a well-to-do strip, you will often have to share your five year business plan and provide personal references and financial status.
> Page Four
|
