Reducing start-up costs, monthly rental rates and protecting working capital are the primary goals of the lease negotiation process. When local and landlord brokers are granted implied permission to communicate amongst themselves without your Franchisee being invited to participate in these first-hand conversations, your Franchisee is more likely to:

• Pay for the landlord’ cost of Capital Improvements.
• Receive little to no Tenant Improvement Allowance.
• Receive little to no Build-Out Time.
• Negotiate no Free Rent and open-ended Option Periods.
• Pay too much in Monthly Rent, with Uncontrollable Base Rent and Triple Net (NNN) Escalations.
• Settle for poor Signage, Patio, Parking and Heating & Cooling (HVAC) Repairs and Replacement Terms.
• Leave up to $50,000 to $200,000 on the table with local and landlord brokers.

FGP Transparency is achieved when Franchisees are invited to attend and participate in our pre-scheduled “broker-to-broker” pre-letter of intent conference call.

This opportunity to listen in on firsthand information protects a Franchisee from being exposed to the financial losses of third-party broker-to-broker communication.

• How much more capital would your Franchisee save if they were transparently included by listening to each telephone conversation about their economic terms prior to a well-drafted Letter of Intent (LOI) being submitted and approved on their behalf?
• What if the local and landlord broker not only doesn’t want your franchisee to listen, but is also a very inexperienced negotiator?
• What if the local and landlord broker are simply looking out for their own financial interests?
• Local and landlord brokers have no incentive to learn, adhere or follow a franchisor processes. They may see your commercial lease simply as a transaction to earn a commission.

Franchisees are left out of these crucial financial conversations because they have been led to believe this is the way the commercial leasing industry conducts business.

Lease negotiation is an art and a science. Psychology is the most important factor, and yet it is the least understood. It starts during the site selection process. Our Core Fore Process offers the highest potential financial savings to a Franchisee.

A properly scheduled “walkthrough” by an unemotional franchisee evaluating the condition of the property and taking photos sets the stage for isolating The Core Four Process essentials that offer the highest potential financial savings to a Franchisee.

Landlord brokers perform hundreds of annual walkthroughs and are trained to ask up to five (5) prequalifying open-ended questions to determine how eager you are, if you are leveraging negotiations with other potential locations, if you have exclusive tenant representation and how easy (or difficult) you will be to negotiate with on their landlord terms.

Upon a successful walkthrough, general contractors can perform more accurate and detailed cost estimates. Our team can properly isolate and negotiate on your behalf the following Core Four negotiation strategies:

• The landlord’s required capital improvement amounts to ensure your space is customized, rentable and up to municipal code within the asking rent.
• The Tenant Improvement Allowance (TIA) requested through successful negotiation.
• The monthly rental schedule required and pre-budgeted in your business planning documents.

The proper build-out period, rent abatement and the special permitting zoning and licensing requirements contingent to lease termination.

NEXT – Letter of Intent