As you are negotiating with the Franchisor over your franchise unit’s Territory (and before you sign the Franchise Agreement), you need to start the search for the right location if a stand alone site is required. Whether to lease or purchase the real estate where your franchise business will operate is a discussion you should have with your attorney and accountant early in the process.
In the bustling world of franchising, where dreams of entrepreneurship meet the pavement of practicality, the right location can either be a ladder to the stars or a slide into the abyss. It’s a tale as old as time, where the mantra “location, location, location” is still true. But what makes a franchise location more than just a dot on the map? Let’s dive into the nitty-gritty, shall we?
First off, navigating the maze of commercial real estate requires more than just a good sense of direction and the locale. It demands the expertise of commercial real estate agents, as well as commercial/real estate lawyers, armed with knowledge and experience needed to protect your business investment opportunities.
Now, you might be wondering, “How do I lease commercial property without selling my soul or my savings?” Ah, my friend, this is where the skill and experience of a commercial attorney comes into play, advising you about your obligations as a tenant as well as the landlord’s responsibilities. Be prepared for a lengthy period of time to negotiate the lease. However, the time and money spent crafting a good lease may mean the difference between keeping costs in line and making a good profit, or struggling to stay open throughout the term of the franchise.
But let’s not forget the heart of the matter: the franchise location itself. Whether it’s a bustling city corner or a serene suburban street, the right spot can make all the difference. It’s where franchise locators earn their keep, pinpointing the goldilocks zone of franchise planning and market research. The quest for the perfect franchise business location is both an art and a science, blending demographics with desires, market research and analytics.
You need to find out early in the process what services the Franchisor offers in locating or assisting in finding the right place for your franchise business. Does the Franchisor have a recommendation for, or even a requirement that you retain, a particular local realtor to assist you? (Important: Do you believe you can work with this agent? Meet them asap.) Does the Franchisor have a sophisticated department dedicated to locating suitable territories and locations within these territories? Or, does the Franchisor place this task entirely on your shoulders, yet reserving the right to approve a location you propose?
What if you are considering the purchase of an existing franchise business? Was this business placed in the right location at the start? Is this franchisee selling to get out of a bad deal with the Franchisor, or a poorly located site?
And let’s not overlook the importance of commercial/ real estate attorneys in this journey. Their guidance is invaluable: deciphering the dry, complicated terms of a lease agreement to ensure your franchise business’ foundation is as solid as possible. They’re the ones who strive to ensure your business investment opportunity is not negatively impacted by the lease.
So, as you embark on this investment, remember: finding the best location, supported by the Franchisor, together with the support of an experienced commercial/ real estate attorney is key to your ultimate success. (Mr. Kilcommons has 38 years’ of practice experience in franchise and commercial real estate law.)
For franchise or commercial real estate assistance, you are invited to contact Kilcommons Law, P.C.
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