commercial real estate training

Commercial Real Estate Agents – Franchise Tenant Opportunity Today

In commercial and retail property today, franchise tenancies are a significant opportunity for you to work on.  Franchise tenants know exactly the property types and locations that they require to make their business model work.  You simply need to know their needs and then find the required properties.

The good thing about the franchise business structure today is that the hard work of tenant selection is largely removed.  Any tenant taking up the lease of the premises for a franchise brand, will already have been vetted and scrutinized by the franchise holder for business skill, quality, and stability.  In other words you are likely to get a high quality tenant as part of the leasing process.

It should be remembered that the franchise business agreement will run for a number of years and work in a particular way.  It is therefore a requirement that the lease to be negotiated ties into the circumstances and conditions of the head franchise agreement.  Any landlord that owns the property or the premises to be leased to a franchisee should be somewhat flexible in achieving the match between the business agreement and the lease arrangement.  The best way to handle this adjustment is to have a solicitor work on behalf of the landlord to achieve the documentation balance and parity.

So let’s go back to the point that you can tap into the leasing advantages of a franchise business today.  Many of them require premises to operate from.  All of them will have studied the local area to understand where the best locations are for their product and or service.

Here are some ideas to help you establish the right communication links for future leasing opportunity with franchise groups:

  1. It is likely that there is a website for the franchise association in your city, state, or country.  From that website, you can usually get a list of franchise brands and models.  The list thereby becomes a cross reference for future telephone contact and cold calling.
  2. Understand how your local area, town, or city is changing.  That demographic shift will provide an opportunity for some franchise businesses.  Get the figures from your local council or municipality as to how the population is changing, where new developments are to occur, how the transport corridors are working, and what the business community is doing.  All of these things will create pockets of opportunity for franchise businesses.
  3. Check out the other franchise tenants that are already located throughout your region.  They will have competitors operating within a similar product or service.  Talk to the competitors in each case to see if they would like to enter the region and tap into the local business opportunity.
  4. When it comes to retail premises and shopping center properties, some locations are well suited to the franchise business model.  Talk to the shopping centre managers and landlords to see what future leasing needs they may have.  You can then judge how that will suit the franchise operators or tenants that you have been talking to.

These four things give you specific leasing strategies to work on.  It is a particular business approach given that the franchise tenant and the business model are quite unique and special.

When you have established the right levels of communication with these franchise groups, you can identify the right locations, properties, and leasing circumstances that allow their operators to be successful.  Over time this can be a highly prosperous arrangement.

By John Highman

John Highman is an International Commercial Real Estate Author, Conference Speaker, and Broadcaster living in Australia, who shares property investment ideas and information to online audiences Worldwide.