Intensify Your Franchise Tenant Leasing of Commercial and Retail Property

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

As a commercial real estate agent, you can and should keep in regular contact with all of the franchise groups regionally and nationally.  Many of them will be looking for property or leasing opportunity relative to their business.

It should be said that most of the franchise groups have a specific leasing strategy and structure.  They will usually have a specific lease that is required to integrate into the lease negotiation.  This is not normally a problem, although it does require special skills and negotiation when it comes to matching the franchise group to the client that owns the property.

The lease that is used with a particular franchise group will have certain conditions that integrate into their franchise agreement.  In simple terms, the franchise agreement needs to match the lease agreement for the property.  You cannot have one without the other if the franchisee is to do business and survive.  The existence of each depends on the other.  You need flexibility in the client or landlord of a property to let this occur.

Here are some other strategies to help you work with franchise tenants.

  1. Contact all of the franchise groups in your region currently.  Use the Internet to chase down the franchise branding and franchise types.  Visit other properties locally to see what franchise groups exist in particular locations.
  2. Build a database of franchise tenancy locations.  It is simply a matter of reviewing all of the business locations and tenants in each case.  As you find a franchise group, talk to their head office or property person to see what they’re doing locally and how they may need to expand through the region.
  3. 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 a feasible choice.  The success of one franchise tenant is sometimes reason to bring in the competitors.  Coffee retailers are like that.  There are plenty of ‘coffee franchise’ groups around.
  4. Some franchises like to be located in a precinct or a property with certain attributes.  Get to know what they are looking for and source the properties of that type.  In many respects they will have a particular property demographic, population profile, and business precinct priority.  Get to know what they require.
  5. 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 that you can focus on.
  6. Remember that some franchises are not based on or require integration with other tenants.  They may be quite happy to locate in 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.

You will have seen many franchise tenants that have a successful business and branding.  Choose the most successful of these and identify what they are looking for.  Be their agent of choice when it comes to property sourcing.

If you want more tips on leasing to franchise tenants you can get them in our commercial real estate newsletter right here.

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2 replies on “Intensify Your Franchise Tenant Leasing of Commercial and Retail Property”

Mike, whilst it seems a bit basic I always get good ideas from the internet. I chase down the Franchise Councils and the websites for them. Those websites will usually have a list of franchise members. It is then a matter of finding the right telephone number for their head office. Over time you can usually find 5 per day and then make the calls. Hope that helps. Regards, John.

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