Franchising Business And Its Real Estate Advantages
Have you ever seen old store images of famous brands like Starbucks, Mc Donalds, Subway and Jumboking? If your answer is yes, then you know where we are heading, given the heading of our blog. If not. Then it is our responsibility to inform you that- It was not that great of a start.
Hard to believe? The feeling is mutual, but it is the truth. Real Estate, these two words have far more importance in any business than you can fathom.
Looking at the growth of all these Franchising businesses, it is evident that all these could have been possible because of a strategic Real Estate Plan.
Establishing outlets in places where people can easily find you need more work than you think. There is more than the eyes can meet. The most difficult situation arises when you want to acquire all the vital locations for your business, but hurdles seem to have attached themselves to a never-ending story.
Yes, the struggle is real. But do you know what’s more real than that?
A Franchising business that doesn’t let you get affected by all these hindrances.
Sensing wide eyes on the screen. Yes, you read it right. A Franchising business. It’s ruling the food industry with the philosophy – “Unity is Strength”.
“Let us tell you how!
1. The Access To A Property Bank
Imagine you are planning to start a business. What will be your first step in getting hold of a place?
Connecting to a broker or finding something online, right? Endless calls, and endless negotiations, leaves you right where you started. Jumping to conclusions and later regretting going for the first property you saw because you were too agitated hunting for a perfect location.
This never happens in a Franchising Business.
In a Franchising business, the franchisee has the privilege of a core team that takes all the burden.
Right from creating a property bank and identifying the apt neighbourhoods to hunting for an ideal location, they do it all.
The core team, with their expertise, identifies 5-10 areas in the city where the business is likely to do well. Known as the sub-zones, these areas in the city have restaurants that are already thriving which indicates that the market is vibrant.
With time and experience, the core team begins to identify a larger bank of convertible locations. Luck plays no role here. It is solely on a well-thought strategic science that filters out most of the uncertainties from the process.
Working with a property bank leaves you with multiple viable options. It makes negotiations better for rent as well as gives you a great head start for your Franchise business.
2. A Safety Net For Landlords
Surprising as it may seem, not all property owners want to hand over their property to a brand outlet on rent, even if it means a better income. Strange, right?
Welcome to the strange world of business!
There are several reasons for this. But the franchisor’s core team never takes no for an answer. They mentor and counsel the property owners, explaining the various benefits they could receive if they leased out their shop/location to a stable brand.
The franchisor plays the role of a matchmaker, pairing the right landowner with a diligent franchisee. The efforts put in by the core team create a win-win situation for all. The franchisee gets a high-performing location, identified and vetted by the team, as a better deal than the market while being legally secure. On the other hand, the property owner gets a constant and steady income through rent. By putting faith in the franchisor’s integrity, the landlord is assured of a guaranteed sum of money each month, plus a safety deposit.
The franchisee, without any struggle, gets the property he or she always had an eye for.
3. Better Rentals
How often do you negotiate in your daily life? Once or twice while buying vegetables?
Many people believe negotiation is a petty thing to do. Remember, things that seem petty sometimes are actually an art honed with experience. One such thing is- The Rent Negotiation.
When you choose to team up with a franchisor, you have the advantage of having an expert team negotiating on your behalf. Rent negotiations have to be fair to the property owner as well as to the franchisee. If you negotiate too hard and get a bargain deal, it may be short-lived. Other brands will make better rent offers to the property owner who will eventually be tempted to opt out of your contract in favour of the higher bidder, after the first year of lock-in. On the other hand, if you have negotiated poorly, the business will not make as much money, and you will feel that you are working only to pay the landlord his rent and the franchisor, his franchisee fee.
Rents are variable. However, in a brand franchise, the parent company takes the lead in pre-negotiating basic rents and safety deposits. An ethical brand will ensure fairness for all making sure that the franchisee gets the property at the best possible rate. It is more challenging for an entrepreneur to venture to scout for locations on their own, and have to crack the deal by themselves.
That’s out of the picture for you because the franchisor’s core team takes the burden for you.
4. The Courage To Say No
Ever been in a situation, where the word no is stuck in your throat yet while responding the only word that you can utter is yes?
Well, that’s what the brokers do.
When you choose to opt for a broker to help you find a perfect location for your business, they only look for profit. Cracking a deal is what they do best. They may not understand your requirements in detail. Brokers tend to show properties that are available in the market; they don’t necessarily create property banks. All they want to do is to close the deals quickly. In this process, one tends to lose the best deal for their business.
When you buy a franchise, the franchisor’s core team knows how to say no to the broker in case they feel cornered. It results in getting you what’s best for you.
Take a moment. All this information could be too much for you at a go. So, take your time to process it while going through the link below.
Yes, it is Jumboking. India’s Largest Homegrown QSR Burger Chain that offers the same assistance as mentioned in the blog.
It is surreal, but it is true. Go check it out now.
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