Hello, and welcome to Episode 38 of the Corporate Real Estate Podcast! This podcast is brought to you by LeaseSmart.com.
Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.
Today Craig interviews Keith Kanouse on the topic of site selection for franchisees. If you are embarking on a franchise venture you’ll want to listen to today’s show make sure your agreement is fair and successful.
One of the first things that Craig and Keith discuss is called a suit for loss profits. Imagine a scenario where you have a 10-year franchise term and for some reason the business runs for 2 years but is never profitable, even after you have invested sums above the budget, and you close your doors. The franchisor can sue for the total royalties you would have paid for your minimum royalty payments. Legally you still have an 8-year obligation to the franchisor. Note that you probably signed a guarantee for the franchise agreement and you are likely going to incur some hefty legal expenses to resolve this matter fairly. Because the truth is there may have been some liability from the franchise itself.
Also, consider the huge effect that certain conditions can have upon your franchise agreement. The status of the anchor tenant at your site is a perfect example of this. A good leasing agent will try to include in your lease a provision for the anchor tenant leaving the site, because that will have a dramatic effect on your franchise. It absolutely will.
This is the most informative, sensible and interesting discussion on managing a franchise agreement that you’ll find out there. There is so much good information in today’s show. We’re so glad you tuned in!
Links for Today’s Show:
Click here to learn more about Keith Kanouse.
Keith Kanouse can also be reached at (561) 451 8090 ext. 1
For more information, be sure to visit LeaseSmart.com