Franchise Tenant Leasing Tips for Commercial Real Estate Brokers

Franchise tenants are a solid and successful part of the commercial and retail property industry.  Every commercial or retail real estate agent should be networking and prospecting the franchise groups for opportunity.

On a regular basis, franchise groups will require property for expansion or change of business.  It should be said that these groups are special when it comes to leasing.  Some understanding is required.

Here is a list of ideas to help you work in this lucrative part of the property industry:

  1. Check out the franchise groups that are already in your local area.  Find out what they are doing now with property and if they have any changing needs.  Every franchise group will have a ‘property officer’ that will know about those requirements.
  2. Research the franchises that are doing business in your country now but not located in your town or city.  They may need to move into the market.  To help them with that movement get some local demographics information and population growth figures.
  3. The existing franchise groups locally are likely to have competitors in their business type.  Find out if the competitors want to enter the area.  A simple telephone call is all that it takes.
  4. These businesses will usually have a standard lease profile.  In most cases they will want to use that lease in any property occupation.  This then says that the landlords for a property (perhaps your clients) will need to adjust to property lease documentation.  It should be noted that the franchise agreement for a location usually integrates with the property lease terms.  On that basis they both expire at the same time.
  5. One thing to watch with these tenant types is that they will have particular branding and signage needs.  Given that they usually bring a solid business profile to a property, the branding is a good thing; you just should consider how the signage will be accommodated and if there will be a rental for the space that it takes up.  Don’t be afraid to ask for extra rental for the signage placement of the tenant.

So there are some good things to do here with franchise tenants.  It is your choice whether you want to work for them as a tenants advocate, or if you want to work for landlords and lease to the franchise groups.  Either way it is a specialist part of the market that can be very rewarding for you in leasing fees and repeat business.

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