Specialist advice
Your move
Andy Emmerson, business development director for Domino's Pizza, provides his top tips on selecting a property for your franchise
When looking for any new premises, there are three key things to help find the right site:
1) Know your customers. Make sure you fully research who your primary target audience is - find out who they are, where they live, how they buy from you and what distance they are prepared to travel to get to you. For example, if your business sells large items, you'll need to look for somewhere that provides your customers with good parking, possibly in an out of town location that's easy for them to get to by car.
2) Audit the existing sites in your franchise. Look at the most successful sites and see what the common themes are between them. For example, are they based in areas of high foot traffic, on a major travel hub or near a large retailer/supermarket?
3) List the key attributes you're looking for in your new premises based on the above. Consider factors such as parking, visibility and access and egress. Score each site you view against your list. There will be some factors where you may have to compromise, especially if it's in a conservation area, but it's essential to stand firm on aspects such as size - if the unit is too small, your business won't be able to cope with demand, and location - if you run a breakfast business, you'll need to be based on the morning side of the road to capture people on their way into work.
When viewing any property make sure you walk and drive around the area at a range of different times of day to get a real picture of the location. See how the site and the surrounding area match demographic information you have for the location and how it fits with your target audience.
Talk to your prospective neighbours as they'll be able to give you a good insight into the area using their first hand knowledge. Remember to take some of it with a pinch of salt though as they may have a slightly different opinion, but it should give you some useful background information.
Rent
Always try to negotiate the best possible rent you can. Compare the rent of other similar premises in the area and make sure you're getting a good deal. Comparing prices online is very easy to do and it could offer you some great savings.
The current market situation is also creating some good opportunities for longer rent-free periods as landlords use this as an incentive for tenants signing a new lease. Make sure you take advantage of this, too, wherever you can. Securing a rent-free period is a very agreeable situation for any business to be in when taking on a new site.
Process
When signing up with any franchisor, it's vital to find out how long it could take to locate premises for your new business venture. Some franchisors will find the site for you and some will leave it to you to arrange so it's essential to make sure you are fully aware of the process and all the likely timescales involved.
We find the premises for our franchisees and ensure our in-house property team provide honest, accurate information up front about how long we anticipate it will take to find a site. A good way to work out the timescales is to review the last 10 developments the franchisor has made. This should give you an indication of the average length of time it takes them from locating a site to completion.
It's also important to set key milestones in the process so that all parties are aware of the key deadlines during the development process. The deadlines also highlight the various works required by everyone involved to ensure the project stays on track. We've found this really helps our property team focus and achieve completion on time. Regular face-to-face catch-ups on the status of the project are invaluable, too.
This process is key to getting your business off to a good start. It's one of the main things you pay your franchise fee for so make sure you know what your franchisor is doing for you throughout.
In the current climate, we're finding landlords are keen to ensure that every aspect of the property is ready to enable tenants to move straight in. Companies such as ours typically want a clean shell, which means that all the tenant has to do is install their own fixtures and fittings. Landlords are increasingly offering this, which is good news for tenants as it saves them time and reduces costs. Moving into a clean shell is ideal for Domino's Pizza because we are able to pass these savings directly onto our franchisees and it also allows us to get our new stores up and running quickly.
Tenancy agreements
Some franchisors will take on the tenancy agreement on your behalf whereas others may leave it to the franchisee to agree this with the landlord. It varies from franchise to franchise and often depends on the size of the franchisor and nature of business.
If a franchisor takes on the tenancy agreement, this can offer great advantages as it enables franchisees to get on with running their business while the franchisor looks after the property and estates management. Franchisees can focus on their product and customer service, which are essential to developing a good foundation for their new business.
Franchisors who sign the tenancy agreement can also be a more attractive prospect for landlords as they will offer a stronger covenant. As a result, franchisors can often secure better rates as the landlords will not add premiums to cover the increased risk sometimes associated with a new franchisee.
Alternatively, some franchisees may prefer to hold the tenancy agreement for their premises to maintain direct control over the relationship with the landlord.
The current climate has certainly created interesting situation for commercial tenants and now is a great time for tenants to find a prime location, negotiate a competitive rate and set up shop.
Andy Emmerson, business development director for Domino's Pizza, has over 25 years' experience in the food franchise industry. Andy and his in-house property team at Domino's are responsible for the company achieving its target of 5 plus new store openings across the UK and Ireland each year.
