Leasing |
| A problem which can bedevil any franchisee is the
numerous minute details often found in the lease agreements. Often the
franchisees get so tied up in the details of starting a new business
that the lease provisions are overlooked. There are certain steps that
the franchisee must take to insure a correct and profitable lease.
These steps include:
2. Understand who pays what expenses. The general rule of thumb is that the landlord or mall owners pay for nothing. 3. Understand the rules regarding signage and trademarks. 4. The franchisee should also try to obtain a promise from the landlord or mall developers that they will not rent space to a competing business. 5. Obtain provision for adequate "cure period" to allow the franchisee to maintain the property in case of temporary cash flow or other problems. 6. Obtain a leasing term to coincide with the franchise agreement. The lease should contain a right-to-renew clause - one that allows a sufficient number of renewals to cover the number of years in the franchise agreement. The lease should also contain provisions for emergencies as well as what happens if the franchisor goes out of business or the franchisee is terminated?
Remember that everything in a lease is negotiable - if the landlord
really wants the franchisee.
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