When you have strong credit, your franchise's financial...
Just like you would ask questions before making a major purchase, you need to prepare for your lease process as a franchisee tenant in Canada. Before you sign a lease and become bound by its terms, here's what you should ask during your lease negotiations.
Who's the landlord?
Whether you're dealing with a large organization, a bank or a smaller landlord impacts your lease discussions. There are various negotiation approaches to the different types of landlords. With a large organization, for example, you may wait weeks to connect with a person over a problem as a tenant, but with a smaller landlord, you can just make a call. Take all these factors into account as you debate the terms of your franchise location's lease.
You'll also want to find out who is in charge of the property management, particularly if the landlord isn't local. Like a smaller landlord, a property manager in the area will be more available to tenants.
What's the building history?
Ask about the interior and exterior history of the property to get an idea of the level of maintenance being done by the landlord and what type of fees you may be expected to pay as a tenant for this upkeep. Find out how stable the tenants are, whether the property has a high turnover rate, and if there has been tenant with similar use of the space to yours that closed down or went elsewhere in the last ten years. A building with a high turnover rate is a red flag. If a business similar to yours closed its doors or moved, the location could have been a factor.
Who's the anchor tenant?
The largest tenant in a development is known as the anchor tenant, and they tend to attract the most traffic to the property. However, these tenants can move or close down, and that could impact your franchise. When an anchor tenant leaves, the people who used to come to the development for that tenant--and who visited other businesses during those trips--will largely disappear.
Is it for sale?
If the current owner is looking to sell the development, you will have to weigh your options. It's possible that you will not like the new landlord once the development is sold, but you will still be stuck there for the rest of your lease.
Location is a significant factor in the success of many franchises, and there's also your bottom line to consider when you're looking at potential site leases. Look at all the angles before you sign any lease for your new business.