Q.  How do I decide what business I should go into?

A.    There are numerous books you can research to answer that question.  Once your decision is made, this website can assist you in the site selection process.  We will help to ensure you have the best chance for success in evaluating the location, the competition and the demographics that surround your proposed business location.  These three (3) components should always be considered prior to making any new business commitment.
 

Q.  Deciding whether to start my own business from scratch or become part of a franchise system is a tough decision.  Can you offer an insight?

A.    This decision is a tough one.  The answer lies in your individual skills to date.  Do you have the experience, exposure or contacts that can provide basic retailer traits, such as accounting, advertising, inventory management, employee recruiting and hiring, real estate construction, legal or computer expertise?  These are just a few of the areas you will become involved in as you proceed down the path to opening your own business.


Q.  How do I find potential franchise and non-franchised businesses?

A.   There are numerous books and magazines to help guide you to the business that will capture your interest and hopefully your passion.
Listed below are just a few:
 

Q.  I received the “Franchise Disclosure”.  It looks like a legal document. Should I have an Attorney review it?

A.   Yes.  Before you execute and return this document, an Attorney should review it.  In many cases, although the Franchisor does not want you to, changes may be acceptable if presented properly.


Q.  Why does it take so long for the Franchisor to respond?

A.    A complete credit history has to be researched on each franchise candidate.  This takes time, especially when numerous candidates apply at one time.


Q.  How do I find out what each franchise charges in the way of franchise fees, royalty percentage and advertising percentage?

A.    Any large bookstore has a section on franchise opportunities.  The magazines or books will list the answers to basic financial requirements.  Many franchise retailers have websites that also provide this information. 


Q.  What is a “protected territory”?

A.    A protected territory is an area assigned for a Franchisee to develop.  This protected territory can only be developed by the awarded Franchisee.


Q.  What is a “radius restriction”?

A.    A radius restriction is an area of no development, normally surrounding a regional mall location for a regional mall tenant.  Typically a Landlord mandates and has lease requirements of a radius restriction as a condition of becoming part of their particular mall.


Q.  How do I find a suitable location for my potential business?

A.  The most efficient method is to identify where your customers live and where they currently shop.  Evaluate the shopping center locations within “X” distances you think they are willing to commute daily.  Sometimes this distance and the customer profile representing your target consumer will be in conflict with each other.  If this is so, you will have to expand your range or select another business or relocate your proposed location.


Q.  How do I evaluate demographics?

A. retailcriteria.com can supply the information for a fee.  All we need is an intersection, or a street address, city, state and zip code.  With the supplied information we can pinpoint your location and place it on a map.  Reports containing population, households, race, and median household income can also be produced.  You decide the distance you want us to “capture”.  (Mile radius of 1, 3 and 5 miles, etc.)


Q.  Why should I contact 4 to 5 different Landlords for shopping center/malls locations?

A. Many times your desired space size may not be available within your desired timeframe.  Each Developer or Landlord has their own “sense of urgency” in responding to your request.  You will also be very surprised at the range of rent quotes you receive.


Q.  How will I know what my location needs should be?

A.   If the business is a franchise, they will tell you the square footage needed.  They will also provide the desired components you should consider in selecting a location.  For example, the minimum number of parking spaces, the desirable co-tenants, the minimum store frontage, the minimum number of cars passing front of your center and the desired income and density surrounding your location.  A more extensive list of components to consider is included under New Center Variables.


Q.  What if my business in not a franchise.  What type of location needs will I have to consider?

A.  Our website will assist you as much as possible in trying to define your needs.  We would advise you to look at the existing businesses in your area that you would consider competition.  Look at the products and services they provide.  How will your business differ from your competition?  How much more or less square footage will you need for your products and services? Look at your competition’s ceiling tiles (normally 2x4 or 2x2) and count them.  This will help you in determining how much square footage your business will need.  Then look at the type of cotenants they choose.  This may provide valuable insight.


Q.  How do I find the name and phone number of the Landlord?

A.   If it isn’t listed in the phone book under the shopping center name, ask an existing tenant.  If you are comfortable sharing a little information, many existing tenants are very receptive in sharing information to a prospective retailer for their center.  retailcriteria.com can also provide you with a list of centers for a fee.  All you need to provide retailcriteria.com with is the name of the county(ies) you are interested in.  The list of centers will contain the following:

Q.  How long should it take the Landlord to generate a written proposal?

A.  It depends on how many properties the Landlord or Representative has assigned to him/her.  If you have called and are quoted a number over the phone with the attitude “take it or leave It”, do not take it personally.   The person may be overwhelmed with calls and/or letters asking the same question.  Try back later or write a letter to the center of your choice with follow-ups until you get a written or verbal proposal.


Q.  After I receive my verbal or written proposal, what sort of time frame should elapse for me to provide a response?

A.   Normally a response to the Landlord should be made within 3 to 5 days.  Do not respond the same day because it relates a signal of  “too anxious” to the Landlord.  Of course, if you are in a “no-build” area of the county, a same day response may be appropriate.


Q.  This proposal is much higher than other properties I have spoken with.  Why?

A.   Some Landlords, especially if there are few vacancies in the area, may ask for  “the sun, moon and stars” because they think they will get it.


Q.  What is fair rent for my business?

A.    Every business is different.  For a fee, retailcriteria.com has the ability to research your proposed type of business, provide you with a summary of the typical occupancy structure your kind of business pays, and provide the average sales volume for your chosen business based on the kind of shopping center location you are targeting.  These variables will allow you to “back in” to the maximum rent you should pay for the considered space.


Q.  I want the Landlord to accommodate all my requests because I am paying a lot for this space.

A.    Don’t forget, you are competing with current and future tenants.  These tenants may be willing to pay more than you for the same space.  They also may have a higher business margin which allows them to pay more.


Q.  What is the realistic counter proposal?

A.   This is determined by the “supply and demand” method.  Is there an overabundance of new centers opening in your area?  Has the community your center is in prohibited new growth?  There is no real answer but the more Landlords you talk to, the better feeling you will have as to “who is chasing whom."


Q.  Why is the Landlord so unreasonable?

A.   The truthful answer is, they are not unreasonable, but maybe you are.  In almost every shopping center there is always one or two tenants that are considered the “Anchors”.  It could be as small as a Starbucks or as large as a Wal-Mart.  This tenant received numerous concessions as the inducement to locate where they did.  Most small tenants want the “Anchor” concessions but the Landlord cannot afford to provide them.  Remember, keep your expectations realistic.


Q.  Why won’t the Landlord respond more quickly to my proposal?

A.   The Landlord has probably perceived that you have tried to “low-ball” them with your counter-offer.  He/she is now  “shopping” your space to other prospective tenants.  This does not have to be a bad thing.  Remember if you had just signed the proposal as it was written, you would be paying a lot more for the next 5 to 10 years than the tenant that counter-offered.  Also signing the opening proposal does not guarantee the space will go to you.  It just helps you move to the next step, the lease.


Q.  We seem so close but the Landlord won’t concede to these few open points?  What do I do? 

A.   Another potential tenant may have contacted the Landlord for your space.  Reconsider how much you really need the open points.  Are those few open points worth the risk of losing the location?  Decide to either “hang tough” or "give in".


Q.  I have a signed Letter of Intent.  Is this space mine or can the Landlord give it away?

A.   This point cannot be stressed enough.  Only a hard copy of a fully executed lease with signatures of both parties involved indicates the space is yours, although there probably are legal exceptions to this rule.  From our experience, a signed Letter of Intent normally results in 90% of the leases being executed. 


Q.  How long does it take for the Landlord to produce a lease?

A.   Most Landlords will produce a draft lease within 2 weeks of receiving the Letter of Intent.


Q.  The lease is “X” pages long and I am not an Attorney.  How do I respond?

A.    We recommend you contact a Real Estate Attorney to address and respond to the lease.  retailcriteria.com does not provide a legal service at this time, but we do have attorneys that will negotiate complete legal comments.  When the lease is fully negotiated, the Attorney will submit the lease document to you for your review and signature.  This service is billed directly from the Attorney and normally does not exceed $3,000.


Q.  Will the lease be completed in one draft?

A.   It depends on the Attorney’s involvement and the number of changes.  There are normally two (2) drafts and then the execution copy.


Q.  The lease is finally in my hands and ready for my signature, but some items have changed.  What should I do?

A.   It depends on how minor or major the changes are.  Changes seem to happen with almost every lease, so don’t place "Grand Opening" ads just yet.  The Landlord may be “nibbling” or trying to get a few more concessions.


Q.  How long should I take to execute and return the signed lease?

A.   The time frame for returning the signed lease should be within 1 to 2 weeks.  Remember, another tenant may approach the Landlord while you are “sitting on the lease”.  The real estate term “time kills deals” is a very real expression.


Q.  What is the time frame for the Landlord to execute and return the lease?

A.   Depending on how large the developing company is, the time frame should be within 1 to 3 weeks.  In some cases, it may take over a month for the lease to be executed and returned to the tenant.


Q.  How soon should I plan my Grand Opening advertisement?

A.   Until you have a few more variables addressed and a proposed timeline for each, such as the ones mentioned below, you need to go a little slower in that department.

Q.  How long does it take the Landlord to complete his part of the construction?

A.   It depends on whether the Landlord has invested any time in this area prior to the lease execution.  Some tenants “back away” at the last moment, so the Landlord usually waits until the lease is fully executed before starting his part of the construction.  Communication throughout negotiation process solves this problem.


Q.  I just received a certified or registered “Notice of Turnover” letter.  How should I respond?

A.    The “Notice of Turnover” letter indicates the Landlord has completed his part of the construction.  Now the site needs to be inspected by the tenant or an professional contractor.  Depending on the extent of the construction and the experience of the tenant will determine if a professional contractor should be hired for the “walk-through” inspection.  On the walk-through, check off the items documented in the lease that the Landlord was to complete before turnover could take place


Q.  Do I need a contractor to inspect the premises before I sign the “Notice of Turnover” letter?

A.   Depending on the tenant’s level of experience this will determine whether a professional contractor should be hired or not. 


Q.  Is the “Inspection of Turnover” similar to a “walk-through” when you are purchasing a house?

A.   Yes.  Consider this your second home.  Would you overlook that pile of trash in the corner and continue with the closing?  Some people would and others would not.  It is up to you how “picky” you want to be.  If you reject turnover for a very minor issue, it will delay your opening by the length of time it takes for your Landlord to resolve your listed issues.


Q.  Do I have to follow the format presented by retailcriteria.com?

A.    NO.  This outline is just the procedure retailcriteria.com employees have used in the past and is very successful.  We thought you, as a tenant, would like to know about it.


Q.  If everything is OK in the space, why should I bother with an “Acceptance Letter”?

A.  The “Acceptance Letter” triggers the turnover date and establishes when you will start owing rent (Rent Commencement Date).  Unfortunately, some Landlords will generate a “Turnover Letter” while their contractors are still working on your space.  In this case, the Landlord will actually be accelerating our rent start date without your response.


Q.  Turnover is completed but I am not ready to start construction and my rent start date has been established.  What do I do?

A.   Frankly, you did not plan your part very well.  Opening a business involves juggling multiple tasks.  retailcriteria.com's website is designed to help guide and aid you in starting a business.  Our suggestion is to “hurry up” because the goal of every new store opening is to open before your rent commencement date.


Q.  I don’t have enough time to complete my construction before my rent commencement date starts.  What can I do about that?

A.   To ensure the tenant, that’s you, has enough time to complete his/her part of the construction and open the store before the rent commencement date, the tenant should begin many things when the “Letter of Intent” is signed.  These tasks may include but not be limited to: