Intensify Your Franchise Tenant Leasing of Commercial and Retail Property

The franchise tenant is an opportunity to be tapped in commercial and retail property today. Some franchise-based businesses are quite successful in today’s economic climate. They offer a product or service that is in demand.

As a commercial real estate agent, you can and should regularly contact all of the franchise groups regionally and nationally. Many of them will be looking for property or leasing opportunities related to their business.

Most franchise groups have a specific leasing strategy and structure. They will usually have a specific lease that must be integrated into the premises lease negotiation. This is not normally a problem, although it requires specific skills and negotiation when matching the franchise group to the property’s client.

Think about your market specifically as it relates to this segment. As a specialist leasing agent helping franchise groups, your services can be valuable to landlords of significant retail properties and franchise brands.

Franchise Agreement Terms

Certain conditions of the lease used by a particular franchise group will integrate into the franchise agreement. In simple terms, the franchise agreement must match the property’s lease agreement. 

Consider your occupancy documents and the properties you could lease to franchise groups. The lease duration and the franchise agreement term should be matched for optimal occupancy. You cannot have one without the other if the franchisee is to do business and survive. 

The existence of each party depends on the other; that is how leasing premises to franchise brands works.  It would be best if you had flexibility in the client or landlord of a property to let this occur.

Strategies to Work with Franchise Tenants

Here are some other strategies to help you work with franchise tenants. Choose the ones that work for you and your location. Get to know the local franchise brands and those that could need your help with property matters in sales, leasing, and buying property

1: Franchise Groups in Region

Contact all of the franchise groups in your region currently. Use the Internet to research franchise branding and types. Visit other properties locally to see what franchise groups exist in particular locations.

2: Location for Franchise Businesses

Build a database of franchise businesses and tenancy locations. Review all of the business locations and tenants in each case. When you find a franchise group, talk to its head office or property person to see what it’s doing locally and how it may need to expand through the region.

3: Consider the Competitors as well

If you find one franchise tenant type in a particular location, try approaching their competitors to see if an extra ‘player in the market’ is feasible. The success of one franchise tenant is sometimes a reason to bring in competitors. Coffee retailers are like that. There are plenty of ‘coffee franchise’ groups around. Balance your retail offering with well-chosen and successful tenants.

4: Occupancy Preferences

Some franchises like to be located in a precinct or a property with specific attributes. Find out what they are looking for and source properties of that type. In many respects, they will have a particular property demographic, population profile, and business precinct priority. Find out what they require.

5: Tenancy Mix Complementary

A good franchise brand will complement a retail tenancy mix.  Understanding and matching the franchise Brands into an existing shopping centre or retail property is a specialist skill you can focus on.

6: Free Standing Locations as Alternatives

Remember that some franchises are not based on or require integration with other tenants.  They may be pretty happy to be located on a property stand-alone.  That being said, they will still require particular property location attributes, improvements, services, and amenities to make the occupancy and the franchise agreement work.

Be Selective with Franchise Brands

You will have seen many franchise tenants with thriving businesses and branding. Choose the most successful of these and identify what they are looking for in terms of property location and property type. Be their leasing agent of choice when it comes to property sourcing.

You can be a tenant leasing agent who explicitly services franchise brands and tenants with unique occupancy requirements.

Why Franchise Brands today in Retail?

Franchise businesses play a crucial role in a retail tenant mix, offering a blend of brand recognition and operational consistency that can significantly enhance property performance.

From a tenancy mix perspective, franchises attract a loyal customer base, driving foot traffic and increasing overall sales for the retail centre. This, in turn, creates a vibrant and dynamic shopping environment that benefits all tenants.

For landlords, leasing to franchise tenants provides stability and predictability, as these businesses often have established business models and financial backing. This reduces vacancy risk and ensures a steady stream of rental income.

Additionally, well-known franchise brands can elevate the property’s reputation, making it more attractive to potential tenants and investors. Incorporating franchise businesses into a retail tenant mix is a strategic move that can enhance the property’s performance and long-term success.