LEASE NEGOTIATION

Once a location is selected and financing is secured, you will want to proceed to Lease Negotiations. It is often amazing what concessions a landlord will make in order to get a lease signed.

Only one in ten landlords won’t make some kind of concession. Here are several kinds of concessions a landlord may be willing to make:

• Build-out space such as: partition walls, carpet, paint, etc. Many locations will be constructed as a “vanilla box or shell”, which means the walls are “paint-ready” and floors are “floor-ready”. Essentially you have sheet rock walls that have been taped and concrete floors.

• Offer free or reduced rent for the first month or two.

• Graduate your rent.

• The landlord may be willing to take less than the normal security deposit.

• If the space needs a lot of work, you can sometimes get a tenant improvement allowance. Tenant improvement allowance is a specified amount of money allocated by the landlord for you to use toward building out of the space.

If you do not feel comfortable trying to negotiate your lease, call us and we will do the negotiating for you.

Once you and your landlord have come to an agreement for your location, a lease will be put together for you by the landlord or their attorney. Leases are often very lengthy and are written using a lot of legal terms and phrases “legal jargon”. We can review the lease for you, but we suggest having an attorney review it as well. It is highly recommended that you obtain the professional services of an attorney who is licensed in your state to review your lease before signing.

These are Items that can be / and must be completed AFTER a lease is signed:

a) “Mr. Landlord, I need the store measurements please”. In order to make an accurate Fixtures and Store Layout, Store Dimensions are needed. If a drawing can be obtained from the owner, even better! This will show you what the store will look like, how many shelving sections and aisles will be created, checkouts, and all store equipment list needed.

b) Open a Bank Account. Right away, open and set up a business bank account. It is easy, each bank will have a list of items that you will need. Also, request a Debit and Credit card with that account. It will ensure smooth purchasing of merchandise and give you points or miles for your business, or cash back i.e. 2% with Bank of America.

c) Go to the local City Hall to sign up for a Retail Occupational License and any other local information additional local licenses that may be needed (fire department inspection for example). Things to look out for are Retail Occupancy Permits and local Sales & Use Permits at the State, County, and City level.

d) What about Signs?

______Contact landlord to get specifications on signage for the front of the store.

______Contact local sign companies to get estimates.

______Choose sign company and take the estimate and illustration of sign to the landlord for approval.

______After obtaining approval from landlord, order the sign.

______Get sign permits (if required).

e) What about Utilities and Insurance?

To make sure nothing is left out, these issues below must be taken care of quickly after signing the lease

______Contact local utility company to have the utilities put in the name of the store.

______Obtain business insurance. The lease will give you the guidelines for the amount of insurance that you will need to carry. Check with several companies and compare prices.

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