Additional financial savings, flexibility, risk reduction
At this final step in the process, a Franchisee will be at the highest financial risk due to their level of “enthusiasm” or they are simply “too tired.” The LOI is a non-binding agreement that outlines the business and financial terms agreed upon by the landlord and franchisee. The LOI represents eighty percent (80%) of your transaction with the landlord and is the transition point at which your real estate brokerage services are complete. The legal review of the landlord lease represents the remaining twenty percent (20%) of the transaction. The landlord will prepare a final lease that will include all terms of the final LOI.
One hundred percent (100%) of all landlord leases guarantee mistakes, oversights and exclusions in this process. There are many reasons, including clerical, administrative, outsourced attorneys and utilization of multiple leases, that contribute to the deficiencies of integrating all terms within the LOI into the landlord lease.
Although an exception to the rule, a high-quality landlord broker can eliminate these mistakes before sending it to the Franchisee’s representative. As a best practice, a Franchisee representative will match the agreed LOI terms to the submitted landlord lease. The LOI items that are excluded will be inserted into the lease if the lease is offered in a Word document and sent back to the landlord broker and Franchisee simultaneously. In the event the landlord submits his/her lease in a PDF document, an e-mail will be drafted to identify the LOI terms excluded from the landlord lease and e-mailed to the landlord broker and Franchisee simultaneously. The complete package of the final LOI, excluded terms and landlord lease are now prepared for the Franchisee’s efficient legal review. STOP and protect yourself with the finer contractual details to clarify landlord requirements and your tenant rights within the lease contract.
FGP Commercial Leasing advises you to have your lease contract reviewed by the specialty of a franchise/real estate attorney for risk assessment. Ultimately, you will make the practical business decisions once you are legally advised on the pros and cons of your landlord lease.
There are three distinct methods of legally reviewing a landlord lease, each of them offering a varying degree of quality, time and financial savings opportunities to achieve your goals. These options will be further explained as a Franchisee progresses in the process.
The Franchise Addendum attached as an exhibit to your Franchise Agreement can be easily overlooked and must be attached to each LOI as a third-party contract to be agreed or further negotiated by the landlord and Franchisor.
Franchisor addendums protect the priority of legal and financial rights to all parties related to the Franchise Agreement and landlord lease contract. These parties include the Franchisor, Franchisee, lending institutions, landlord, equipment leasing companies and any other entities that may be related to the franchise agreement or landlord lease.
Property Interior Inspections and Design Audits
FGP is a third-party verification company that performs interior design and quality assurance to maintain high brand standards in all aspects of exterior and interior inspection, furniture, fixture and equipment, cleanliness and hours of operation. This compliance and inspection service ensures the standardization consistency of branding and customer experience. We utilize a network of over 1,000 inspectors (across the United States).
Primarily, our compliance inspectors are certified to perform services in real estate, banking and franchise system compliance. Enforcing the consistency of franchisee compliance is very important and can see and prevent non-compliance and legal issues, as Franchisors have a difficult time enforcing the rules and expectations.
Our auditors can provide you with factual reports that cuts through the Franchisor’s personal relationship and abstract favoritism. Ultimately, our reports can provide easy-to-discuss talking points in your Franchisor’s hands.
Construction Management Site Surveys & Cost Estimating
Our leadership team offers extraordinary cost estimates and construction management services nationwide. We have built nationally recognized restaurants throughout the US and are licensed in most states.
We’re proud that our construction management teams have so frequently been lauded for high standards of quality assurance and control. Whether for a ground-up project, major building alterations or a tenant build-out, our experienced construction management team works diligently to ensure that our projects are completed on time and on budget.