Franchise Tenant Advantages for Commercial Real Estate Agents

A franchise tenant will in most situations bring better chances of opportunity and stability to an investment property.  That is the case largely because the franchise model for any business is already established and proven.

Logic says that landlords and property investors should seek a suitable franchise type tenant to fill a vacancy in their property wherever possible.  The chosen tenant can then bring better profile and image to the overall tenant mix within the one property.

Certainly a franchisee may still fail in their business activities; however the odds of doing so are less than any ‘independent businesses’ for the reasons mentioned.

Taking this a step further real estate leasing agents should focus on getting to know all the top franchise groups that need space locally, and for what reasons they need that space.  They will all have specific property needs in location, improvements, profile, and access.

Here are some very good reasons to work with these tenants and also some ideas to help you do so:

  1. Most franchisors have a marketing model that helps franchisees succeed.  That marketing model is usually locally based to help pull in new clients, sales, and repeat business.  The impact of the business brand for a franchise group is already well known and established.  The tenant will however require suitable signage and branding capability on your building.  You may want to charge a signage rental for that placement, in addition to the rental for lettable space inside the building.
  2. Look around your local property market to see what businesses of this type are already active.  From that investigation you can soon see their competitors that may like to move into your building with its vacant space.
  3. How many local businesses are of a ‘franchise nature’?  There are many and the local business telephone book will help you find them; for example bakeries, gyms, grocery convenience stores, pool equipment shops, and the list will go on.
  4. Contact the head office for each of these groups to see who the property or lease procurement officer may be.  In each case make personal contact to set up a meeting where introductions and information can be exchanged.  They will have specific requirements as to lease terms and occupancy conditions that will be reflected in their standard lease; the standard lease is usually matched to the terms and conditions of their franchise agreement, so the whole occupancy package is designed to work.
  5. Tenants of this type have a business model that is proven, as well as a training package to help franchisees progress successfully in their business.  They also have a stronger focus on customer service and support to protect the overall brand.  That can then lead to improved chances of tenant success, profitability, and occupancy strength.

So if you are a real estate agent looking to work in investment property leasing, there are some valuable tips and points of focus here with franchisees and franchisors.  Study the local property market and look for the right groups and tenants to talk to.

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