Hi everyone! Just got some great news! My main competitor is closing its doors! I have been offered their space, they are still locked into their lease for another 3 years and have been asked if I want to give them an offer to take over their space.
What I am wondering is, has anyone else been offered such a thing, or know what is a reasonable offer to make. I do have some thoughts on my proposal, I have been thinking of this for quiet some time as I knew their days were numbered. It is a better positioned space, etc. etc. I know the traffic is better, and quiet confident that things will be better in this space for a number of reasons. Mainly my difference in selection and variety then they offer. I will leave my thoughts on the offer to myself for now so as to not influence what others may think on this. Basically what they want to know is how much I want to take over their lease. I am thinking a certain amount of months paid lease, and cash for moving expenses.
Any opinions or advice? Thanx so much everyone
If the rent is cheaper, its a no brainer. How long you have left on your current location? If the lease is really favorable, it has monetary value for you.
Otherwise, your just letting them off the hook for the remaining terms of the lease.
If you want to make the move, i would offer to take over the lease and give them $0. We are in a recession, and getting top dollar for anything today is hard.
take into account that if you do not take it you will probably have somebody else that will be your competition to replace them if it is already fitted for restaurant space…they are obviously in a financial bind so imagine now that they have no revenue stream and are on the hook for the rent…if you really want it I would take over the lease as Rob mentioned…if that does not work go to the landlord directly
Thanx Rob. The lease is the same, but newer complex. WAY better exposure. But I think you miss understand, I will be asking them for renumeration, not the other way around. My lease is ending very soon, same landlord as the other place. They have 3 years still to pay out. So if I take over I am doing them a favor. So will be asking for… well that is still to be determined
So this means you will be moving down the road 1 block?..
Is the lease at the new location less or more than your current rent?..
How much of the equipment and fittings are staying in place at the new location?..
How much will it cost you to remove equipment and leasehold improvements at old location?
Why do you have to move? Why not open a second location on the cheap?
That’s the kind of thinking I like!! Maybe a bit too close and maybe not the right time with her financial position maybe canukfanlady can comment on this.
I also like the idea of asking them for remuneration - good call - as long as its cheaper than the rent but why are they closing up?
Personally with the economy being what it is and if this location will better you and your business, and you said your current lease is up soon… why not be civil about this and just cover yourself. First other than a better location are the spaces of similar size? What is the value of the contents and equipment if they are staying? How much will it cost you to move your operation and lost income during the move. If you get too the point of asking for too much they will probably find another taker. If this will truely better you then you also need this locaton for your sake. Depending on value of contents as an unknown here… I would say you are fair to ask for the difference in your current lease monthly payment and their payment for a period of the first year of the take over and a flat fee to cover moving, set up, and lost income that you will have to absorb. I would think that one year difference is enough as you should be feeling the benefits of this better location by that point if it is worth the move in the first place. Remember they are closing and getting out of a business. They have other options to break that lease that yes would affect them more credit wise but would cost them practically nothing. Be considerate to their situation and I think you can come out ahead here. The contents still have me thinking…if they have a lot invested in the contents and they are included here, you may come out quite a bit ahead for not having to do much at all.
I everyone! And thank you so much for your input. I’ll answer a few of your questions, the answers that I know anyway.
#1 they are a large pizza chain, not an indy.
#2 there will be no equipment as they are taking it to fill another store, they are cutting their losses in my town and pulling up the stakes in my town. they did not do as well in Canada as they have in the US.
#3 as for wether there will be any millwork left and so on I wont know that until they have left and I go see the space on Tuesday.
#4 Wizzle is right, as second location is not in my financial ability right now, not to mention that it is literally next door to my current location, I do not think it would be beneficial enough, not to mention the lease is quiet large and paying double is just not an option at the moment.
#5 So seeing as they are still locked in for another 3 years. I think what I have in mind as far as numeration will be considered reasonable. I will be asking for moving costs, utility hook up costs, sign replacement costs, and loss of business during the move. I am not going to be going crazy on how much I am looking for, only what it will truly cost me.
I just wanted to add while I am here how much I appreciate you all, so many of you have helped me along the way since before even the beginning of my business, it is a haven I look forward to in times of pitfalls and triumph.
Thank you thank you thank you
How much time left on your lease?..I would ask for your costs to move your operation to new location and enough free rent so you are not paying at 2 places at once…Best case scenario, how many days will you have to shut down to change locations?..
Same owners in my building to new building. They r willing to squash my lease to have me take over other space & re-sign at new place for 3 years. Moving down time? I’m thinking a week. I’ll stay open at old location till repairs are done at new place, might not even take a week. Some of these finer points will have to worked on, after the leasing company answers a few more questions I have on the transition timing I know a little better what i’ll be expecting to pay out and therefore what to ask as far as renumeration is considered.
What are the differences in space and price?
Virtually identical. Their space is a smidge smaller, but has better lay-out I think. And the rent is about the same though they are a bit smaller. Prices are higher on that side but have already negotiated the same pricing as I pay now with the leasing company. Newer complex. It has only been open a year. Plus it has a large grocery store in it that draws in alot of people that I dont see in my complex.
I shudder at the idea of closing for a week. The last time I moved my store I purchased a new hood and had it hung ahead of time and moved the equipment over in the middle of the night. I had the signs, phones electrical, rough plumbing, and flooring done ahead of time. From 3 AM till Noon was nothing but a mad rush to load, move, unload and hook up all equipment. Got health dept approval to open around 2 and missed about 3 hours of “open” time.
To be honest, I dont think I would have to be closed at all. I was just thinking off the top of my head. But in reality, I dont know that I would have to be closed. If I kept going at this location while new signs were being made, etc. etc. I dont see that I would have to have to. The timing could be worked out to run much smoother, as long as I co-ordinated effeciently I have to try and be more optimistic, lol. I’m more of a worst case senerio thinker, lol. But seeing as their business, is very close to mine, I dont see that it would be much of a problem making sure it ran smoother than my pessimistic glass half full thinking. Im kind of in negotiation mode, and making sure I dont end up with the short end of the stick, lol.
Instead of hitting up the old tenant for extras, treat the move as a new lease and ask the landlord for a couple of concessions.
Possibly free or reduced rent and anything else you feel might be appropriate for your situation.
Remember that visibility is one of the most important components to a successful operation.
It allows you to implement “banner shaking” as well as other marketing opportunities for keeping TOMA (top of mind awareness).
Being next to a grocery store will allow you to garner low hanging fruit. People who did not know you existed will patronize you due to the proximity you now occupy.
Good luck on the move. Just don’t trip over the dime to pick up a nickel when you negotiate the new lease. I would think your goal is to go to a better location, even if you don’t get much from the previous tenant.
I would never sign a 3 year lease. I would always look for 3 5yr terms. If not you have nothing. There is very little value value to the business owner when you try and resell with little time left.
just food for thought
must have the options as said above…also who is to say that this franchise does not move to an even better location
Good luck to you, it does sound like a positive move.
I would try to get their phone number, anybody that would normally be calling them would reach you instead.
Also ask the landlord if you can put a banner in your old locations window, until they rent it out, that you have moved with the new address on it.
As soon as you know this deal is going through, start letting your customers know that you are moving, nothing should leave your shop without a note of this move.
just a couple of quick thoughts… if a chain couldnt make it in that spot, what makes you think you would do any better there? second, if you move, there will always be a percentage of your customers who see the old spot empty and think YOU went out of business, no matter how many “weve moved” signs you put in your window. given your financial position, i would try to stay put unless you really think that you would do better… much better, in the other spot. just my opinion.