Jacksonville has had a surge of successful franchises this past year, including the ever-growing footprint of Maple Street, the introduction of Jimmy Johns to Downtown and the announcement that Charlotte-based Brixx Pizza is coming to Brooklyn.
If you’re thinking about taking advantage of the franchise momentum in 2016, there are several factors to consider in selecting a location, said Katy Figg, associate of retail leasing with Franklin Street in Jacksonville.
Figg, who specializes in helping franchise owners find real estate for new locations or expansions throughout North Florida, created a tip sheet for the top things to know before opening a new franchise.
Timing– If an owner is looking to open a location in the next few years, now is the time to plan. A deal signed in 2015 might been doors open in late 2016 or even early 2017. “Franchisees need to have a realistic outlook on how long the process takes,” Figg writes. “There are several factors that contribute to this timeline, including permitting and construction, timeliness of the owners, and landlords and attorneys involved, and condition of the delivery of the space.”
Market conditions – Franchisees should be aware of what is going on in the Jacksonville market, especially as the real estate world evolves quickly here. Figg says the best centers are close to 100 percent full, if not completely leased. Increased demand has created increased rents, a trend that is expected to continue. “Tenants are competing for space more than ever and it’s important to be well educated on what’s available and be prepared to move on it quickly,” she said. Figg added that new construction can mean higher costs and longer timelines.
Paperwork, contracts and documentation – Since the recovery from the recession, the paperwork process has gotten more extensive, complicated and time-consuming, Figg writes. Landlords are taking less risk in their contracts, and expect higher security deposits, stronger guarantees, extensive background information and clear business plans.
Location – Opening up at the location closest to home isn’t the best idea, she said. While it sometimes works out, selecting the right location comes down to more than convenience — and even then, convenience for customers is more important than convenience for the franchisee.
Co-tenancy and entire site – Beyond convenience, other factors for selecting the right location include traffic counts, location of competition, available parking, visibility to the road, signage availability and timing of the project. In addition to where you should go, those factors can help decide if you should have a standalone location or go into a shopping center. Figg says that depending on your size, there may not be enough parking for your franchise in a center with co-tenants.
Ongoing business relationship, contracts and renewals with landlord – The key to selecting a franchise location doesn’t just come down to finding the spot, but what the future interactions with the landlord will be like. “Franchisees need to make sure the relationship with their landlord is a healthy one,” Figg writes. “You are entering into a long-term relationship and both parties need to understand what they are getting themselves into.” She adds that increases to rent and renegotiations can come up at any time during the lease, so the stronger the relationship is with the landlord, the better position a franchisee will be in to make a case for reduced rent, an extension to build-out time, or other needed changes.
Market and growth planning – Figg suggests thinking about your franchise’s business plan: Is it a one-location or a multi-location endeavor? Are there timelines or targeted opening seats or deadlines to meet in the franchise agreement. Figg said a broker can help assist tenants with expansion and multi-location plans for years in advance.