Starting a franchise is exciting, but it also offers reassurance: franchises are proven business models, and buying into one often comes with plans and marketing advice to get you started. As you plan your new business journey, it’s crucial not to overlook the importance of your commercial property. We’ve guided many first-time franchise owners in understanding the ins and outs of handling commercial properties, here are the property questions you need to ask!
Why Asking These Questions is Important
Your commercial property doesn’t just give you a place to work; it represents your brand and the lease contract can play a big role in whether your business thrives. Starting off on the right foot now could prevent expensive mistakes later.
Top 10 Questions You Need to Ask
1. What are the real total costs of renting a commercial property?
Don’t just look at the base rent. Take the time to review other costs, such as service fees, business taxes, utilities, insurance, and upkeep responsibilities. These extra expenses could end up doubling what you expected to pay.
For instance, what seems like a reasonable £20,000 annual rent might jump to £40,000 once you add these extras.
2. Is the lease term adjustable?
Franchise contracts and property leases don’t often align. What if your franchise deal lasts 5 years, but the landlord insists on a 10-year lease? This is something you’ll need to evaluate and negotiate.
Ask about break clauses, renewal terms, and whether you are allowed to assign or sublet the property if necessary. These options might be crucial to get out of the agreement if your plans fall apart.
3. Are there restrictions that could affect how I run my franchise?
The franchisor might set certain rules, but does your lease support those rules?
Look into whether there are limits on:
- Business hours
- Branding and signs
- Allowed usage of the property
- Making changes or fitting out the premises
- Noise or equipment regulations
4. Who are the customers, and how busy is the area?
The location you choose can either help your franchise succeed or lead to its failure. Ask for data on foot traffic and demographics, you want the data to match your target customers.
5. What obligations might the lease hide?
The lease document is more than just paperwork. It holds key details about your responsibilities, such as;
- Paying for property repairs
- Handling maintenance tasks
- Meeting insurance needs
6. Will nearby businesses help or harm me?
What about that empty shop next door? It could turn into your biggest rival or your strongest ally. Look into:
- If there are exclusivity clauses stopping similar businesses from opening near you
- The landlord’s plans for the tenant mix
- Any upcoming developments in the area
- How long the main tenants’ leases run because if they leave, your customer traffic might drop
7. How do I prepare for the future?
Your franchise could change over the years. Will your location work if it does?
Think about:
- Opportunities to grow
- Tech setup (like internet and connectivity)
- Shifting customer behaviors
- Ways to use the space for various needs
Smart business owners always think ahead, we advise our clients to focus on a commercial property and lease that can nurture long-term success and potential growth.
8. How good is the building’s condition?
It might be presented well and been freshly painted to provide you with a blank canvas, but that fresh paint could be hiding major problems. Get a professional to inspect the property before making any decisions.
Things you need to check:
- Any signs structural damage, such as cracks, sloping foors and more
- Signs of dampness or leaks
- The electrical systems
- The condition and efficiency of heating and cooling systems
- If it follows all current legal standards, such as accessibility
9. What if my franchisor changes the rules?
Franchisors often change their branding and operational rules. Can your lease let you make those updates?
Think about:
- Getting approvals to make changes
- Rules about signs
- Upgrading technologies
- Paying for changes
Your franchise agreement says you have to make these updates, so you need to check that your lease does not stop you from doing it
10. What happens if you need to leave?
Nobody likes to think about failing, but it’s important to prepare for everything. What are your options if things go wrong?
Learn about:
- Fees to end the lease early
- Rules on transferring or subleasing
- Breaking the lease if needed
- Fixing the space when leaving
Getting the Right Advice
Choosing the best commercial property for your franchise can feel challenging. At The Lease Negotiator our small team of experts are here to help. Whether you need support selecting the ideal spot or working out lease terms to safeguard your business, we’ve got you covered.
We strive to always go the extra mile to support our clients and are eager to assist in making your franchising plans successful.
Take a look at some of the businesses we’ve helped HERE.
