Letter of Intent
Each Franchisee will be invited to attend a pre-scheduled conference call to actively listen to direct broker-to-broker communication. This increased transparency maximizes our Franchisees’ input throughout the negotiation process. Listening to our senior broker asking up to 20 financially important questions on your behalf strengthens a collaborative negotiation process, which maximizes your economics of the transaction.
The negotiation period will depend on whether the property is owned by either a local, regional or institutional landlord. Counter-negotiations can occur as quickly as the next day or as long as two weeks. Being overly eager to contact the landlord can cost thousands of lost dollars. Our response times are measured because they mean money to you… patience pays!
- How eager is the landlord to lease his/her space, and what small and large tenants are renewing or leaving?
- To get the landlord’s listing agent to describe the condition of the property to make sure it aligns with our client’s walkthrough condition.
- Is the property up to code with regard to the bathrooms, e.g., is ADA compliant, and other interior/exterior compliance?
- What is the measurable rentable square footage?
- What is the landlord’s unnegotiated rent?
- How long has the property been vacant and how much build-out time and free rent has been offered?
- What kind of capital investments is the landlord willing to make to bring his property up to vanilla-shell, white-box condition?
- How much tenant improvement allowance can be negotiated? What condition is the HVAC, and is the landlord willing to pay the demolition cost to bring it back to a vanilla shell?
- When will the property be ready for delivery?
- Does the landlord prefer to do the tenant improvements with his/her own contractor to save time, or is it preferred that our client retain his/her own contractor and be reimbursed for the tenant improvement allowance?
SUBMITTING THE LETTER OF INTENT
Upon completion of a successful walkthrough and our pre-LOI meeting, we collaborate with you to determine the key priorities unique to your personal and financial situation, goals and the many strengths and weaknesses of the desired location. There are 23 critical items to negotiate and balance out to maximize the lease negotiation process and achieve your location and economic goals:
- Lease Terms
- Security Deposit (refundable)
- Rental Abatement
- Permit Contingencies
- Eight (8) Early Termination Clauses
- Broker’s Commission
- Rental Rates
- Renewal Terms
- Tenant Improvements
- Corporate Signature
- Parking Allowance
- Franchisor Addendum
- Personal Guarantee
- Lease Execution
- Sublease Assignment
- Signage Regulations
- Early Termination
- Vanilla Shell
- Build-out Period
- Demolition Costs
Each item is a weighted bargaining chip and contributes to a give and take opportunity to achieve our economic goals. We will ask for many of these areas within the LOI to secure the primary areas of our interest.