Brick & Mortar Negotiations: What should you ask for?

[Bronze_Palms]

The title of this thread has been edited from the original: Brick & Mortar Negotiations

Hi friends! I am in the process of getting my second salon.

For those of you who have a brick and mortar, what are some things you glad you asked for during negotiations and/or what are somethings you wish you would have asked for when getting set up with a lease?

TIA!

[mpmpmp22]

Hey @Bronze_Palms! 

Not sure if you saw this post from @TCSlaguna about Determining the Optimal Retail Store Size, but might be good to check it out as well! 

Tagging some of the community members there to potentially share their insights too! 

@BofBArtStudio, @Doran, @DinaLRosenberg, @Michael_L, @Candlestore, @vinesandrushes  & @Twiggy 

[PartyManiaMD]

Honestly you should ask for as many concessions as you can get depending on the location. I'm in a "busy" downtown corridor that is still lagging in terms of business and foot traffic. Most of the brick and mortars are negotiating anything from half off rent to upgrades to their buildings. Don't settle for less and realize there is tons of empty commercial real estate, they'll always act like it's hot and they have lots of people lined up but buildings are sitting empty for years.

You should definitely spend a few days or even a week hanging out and seeing what foot traffic really is like as well as check out how busy the other stores in the area are. Obviously keep in mind location is everything and a busy shopping center will negotiate harder and have more foot traffic than a standalone building in a less busy retail corridor.

When I negotiated our current lease we got a lot of things we wanted and a lot we didn't, would have liked a month or two of free rent to give myself more breathing room but on the plus side they didn't require a personal guarantee.

[Bronze_Palms]

I agree with that! I wish I would have hung out local to my first location to see what the area was like before moving forward with a lease. My space is great, but we get an eclectic clientele in the late evening that is less desirable to my clientele due to the smoke shop/lounge next door.

[Michael_L]

In my case I've negotiated on two locations so I'm not really an expert.

One thing - it's helpful to know how in-demand the location is when negotiating.  If it has been empty for a while you can get a lot more bonuses than if there are multiple applications. 

Typically you won't get a cheaper rate on your rent, but you might get a couple months free ("to help establish your business") or perhaps the space will be cleaned out for you (a "white box" means they've cleaned out any leftover crap from the past tenants). 

Depending on the building, also ask about extra signs and advertising - being able to place an extra banner or sign at other entrances or participate in some joint advertising won't cost the landlord directly but could help you a lot.

[isabelle]

WOoooHoooo @Bronze_Palms ! Exciting! 

@lenjobakes may have insight from when she opened her 2nd location, The Shed. 

[DinaLRosenberg]

Most any decent landlord will give you at least 2 months if not more of free rent. White painted clean walls... white box ready to go. The more work you need to do in the space then more time you should get.

I've seen restaurants get money for plumbing or electric or have the landlord help with the build out.

You can also do a graduated lease that steps up.

[doc_choc]

Should you exit your contract check for your dilapidation liability and make sure you are happy with the terms.

[GourmetOnWheels]

Look at Google maps and see the history, that way you can see how long this place has been empty. I have seen places that have been empty for 16 years.

Rene

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[MudFire_Dex]

We've seen everything from 6 months free rent to $30 a square foot in repairs/construction but for locations that don't work for us for a second MudFire - unfortunately it is rare for someone to cap escalations or CAM/OPEX and those added to the monthly rent can be a killer. We negotiated no rent escalation for 4 years in exchange for a re-roof recently because as a NNN lease we are responsible for the roof and were tired of allocating funds to 'fixes' on a building we want to purchase at the end of our lease.