1. Get experienced support business to succeed.
2. ****yze the area
3. Sweat the lease details
In Franklin's first lease negotiation, he didn't realize that signage on the property would incur extra charges. He left that out of the lease negotiation, and it ended up costing him more than he had planned.
There are other hidden charges. For example, Raymond W. Titus--CEO of United Franchise Group, the West Palm Beach, Fla.-based franchisor of sign franchise Signarama and embroidery franchise EmbroidMe--won't let franchisees lease space in a facility that requires "percentage rents," which set rents based on revenue. Titus also looks for potential problems, such as ensuring that facilities for his signage franchisees have enough power.
Franklin warns about common area maintenance (CAM) fees, which require tenants to contribute to the maintenance of common areas. These should be capped and allocated by square footage rented and not by occupancy levels, he warns.
But franchisors can use their muscle to find hidden concessions, too. Hoose and his brokers try to help franchisees look for "build-out money," where a landlord will fund a portion of the construction on the property in exchange for a specific lease period or other concessions. Since the economic downturn, he finds this money easier to negotiate and has helped franchisees secure as much as $40,000 to $50,000.
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