This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
i am planning on opening a tee shirt store in a plaza..great walk-in & drive-by traffic...great stores over 40 stores..subway..mc d's..pizza hut...food lion supermarkt...sports bar & many more...excellent location...but rent is close to $3000/mo..for 1400 sq ft of space...
after weeks of negotiating i was told it would take 2 weeks for the lease to be prepared sent to the lawyers & sent for me to sign..well we are into week #5 & still no lease..was told that its with their lawyers
we worked out deals to get 5months free rent in return of us doing the work to get the store in shape for us to set it up to open the doors...
was hoping to be open for the holidays & thanksgiving is now out so we are hoping to have it in time to fix the place, order fixtures & supplies for christmas 2009...
is there anything i can do now other than wait?
if the owners of the plaza changed their mind on us getting the space, wouldn't they have told us instead of stringing us along?
or is this normal in this plaza (strip mall) world?
and should i start looking for a new location??
thanx for any help
mocha
If it's still being held up with the lawyers, there is clearly a problem. Perhaps the leasing agent you dealt with didn't have the authority to give you the 5 months free? The reason why I question that is because the 5 free months would include November and December. Most malls, plazas, etc charge an extra premium rental fee for those months. So giving them for free, even though you were providing a service in return, may not have been approved.
You would think if something went wrong they would contact you, but it doesn't surprise me that they haven't. I've dealt with malls, it's a cut throat business. If someone came along and were willing to make a better deal, they would back out of our deal in a heartbeat.
Have you checked the location, has anyone else moved in?
Unfortunately, I'd say there is nothing to do but wait. Since you never signed anything with them, there is no official deal in place. Did you let them know you wanted to be in for a certain date? If you don't hear back from them soon, it may be time to look elsewhere.
Hopefully there was just a simple delay and it works out for you.
thank u..
I did say i would like to be in the building by nov 1...no one has moved in & i even asked my realtor is someone else up against me? she said no & the space has been vacant for one yr..
my real estate company is located right in the large plaza as well..about 7 stores down & they have the key...
the owners own 50,000 sq ft of mall space, so im thinking they just are handling other business in addition to mine..
so u think they will hold out until AFTER the holidays...which is dirty & would make me want to seek elsewhere just for spite but the location is soo perfect..uggghhh
If your realtor said there is no other bidder, then it could just simply be taking long. Hard to say, but perhaps this is common for them. Would they be willing to let you start on fixing the place while the contract gets written up?
I can't imagine why they would purposely stall, other than being interested in finding a different tenant. But it seems they would be better with you occupying the space than no one at all.
Are you paying any kind of percentage of sales or just the flat rent payment? If it's just the rent payment, I guess there is no real sense of urgency on their part. Whether your lease starts in November or February is the same for them. But I can understand your frustration with that, cause the holidays are a legit profitable retail opportunity.
It's what they do... Especially if they recognize an emotional attachment to a space. The longer they delay, the more likely you are to accept their terms and post LOI changes.
Time is also eaten up by having too many people involved i.e. Lessee - Lawyer - Broker - Broker - Lawyer - Lessor. In my experience it's best to try and deal with the landlords directly.
In today's economic climate, you should be getting excellent rates, build out allowance, and free rent.
I would express extreme disappointment and give them a deadline like three days to get the lease in your hands. Then beware, just because you've signed the lease doesn't mean you'll get the keys to the place right away. Tell them you'd like an addendum to the lease that states exactly when you get to take control of the property or the lease is terminated. Make this time period no longer than one week and preferably two days.
oh Big Frog...i would loove to come at them like that but i am soo nervous because i really do not want to lose the spot..
BUT..
i have been hearing how stores have had wonderful specials because they want tenants in their location..
now the build-out...can u explain what that is because the store itself need work done to it so that is why we are doing the work ourselves in exchange for the 5 mo rent..so was that a good deal???
you are correct we do have many other people involved in this & i would LOVE to talk directly to the owners...i never have...they have a rep who my realtor has been in contact with thru-out this whole process..once he sent it on to the owners, the rep said "its out of his hands"
i have been contemplating sending someone an e-mail so i can be heard but i am soo new to the this i really dont know exactly what to say & again i do not want to lose the location..it is in another state & i have been taking trips there for 6 months visiting other plazas & no other has the potential (in my eyes)as this one..the set-up of all the stores, etc...
before i was able to see the store i had to submit a business plan & financial proposal & i finally saw the store & the negotiations began immediately after..the end of sept was when i submitted all paperwork, completed negotiations & was told by the rep they want to get us in as soon as possible...so we waited & now we are in the beginning of nov...i put the apt on hold to make sure that i get the store before i moved in to the apt...
sorry for rambling...i just love this forum & respect everyones love for this bizness..Im at my wits end & i hope this forum can get me in my store!!! LOL..
i am attaching a photo of the store..please tell what u think..
See... you've developed an emotional attachment to the place which puts you in a position of weakness from a negotiating standpoint. It's OK though... it tells me that you are passionate about what you are doing.
It can't hurt to at least express your frustration to your rep (he works for you). Tell him you're thinking about walking away from the deal unless you can get some answers regarding the delay. If you really want this place it sounds like you'll just need to be patient. It will happen.
Build out is just having the lessor supply you with either a "vanilla box" (ready to move-in condition) or provide you with an allowance of money to get the place into ready to move-in condition. In addition to the build out allowance, you can negotiate free rent and other things.
I might ask for more free rent due to the delays. Essentially the lessor is jeopardizing your ability to launch your new business during the holiday season and potentially impacting your ultimate success.
If you miss the holiday season be sure to have a huge grand opening! Will you be doing any production from your store?
First thanx to u Big frog & kimura for your speedy answers..
my nerves have been calmed slightly but i am growing very impatient but if i must wait so be it.
i have spoken 2 my realtor & she is just as lost as i am.
i have released all of my frustration on her so she knows & understands why i am impatient.
but i have told her 2day to go ahead & begin looking for another location..
If they ever get back with me, i will ask for more free rent..i was thinking the same...all they can say is no, huh?
i dont have a phone# for the owners..would u suggest i send an e-mail? The realtor suggest that i do NOT send it but i am so sick of them not responding & jeopardizing me getting in b4 christmas..
i guess will have to look forward to a fabulous grand opening..and yes i will be doing all production from the store..i plan on bringing in someone who does silk-screening because i specialize in heat press & rhinestones.
Is your Realtor a friend? If she is that lost in the process, I am surprised. She should be in constant contact with these folks. I don't think I would recommend that you send the owners an email, however they should understand somehow that you are looking for another property. That should motivate them unless there is something weird playing in the background that you don't know about.
If you do have to restart your search, find two or three properties and get LOI's (letters of intent) from each. Let each know that you considering other properties. And don't get too attached, as you have to be willing to walk away at a moments notice.
Just so you know, this is typically the longest process in opening a retail store... site selection & lease negotiation... And one of the most important.
As an FYI - I have an interest in 10 successful t-shirt shops and have been involved in every step of the site selection process and lease negotiations. I would be happy to send you some information that you might find helpful regarding site selection. Just IM me with your email and I can send you a couple of documents that might help.
I FINALLY RECEIVED THE LEASE!!!!!
BUT....
*they want percentage rent..6% of my gross
*cannot handout flyers in shopping center
*landlords will not be responsible for anything..permits, bringing up to code, the work, etc
*i must submit my paperwork every 30 days to show my gross sales during each month
*they have the right to come in my store unannounced anytime & for any reason
*i cannot sue them for anything
are they CRAZY???
or
is this typical for commercial renting in a shopping plaza??
mocha
These leases are always very one sided so it's pretty typical. It's time to negotiate the lease terms.
Is the 6% in addition to a fixed fee?
I would not be held responsible to bring their building up to code, that could be a complete nightmare.
You are typically responsible for your build out but you can ask for a build out allowance - tell them you would like a $10,000 allowance in addition to free rent during the build out phase which should be at least 60 days.
If you have a fixed rent and can don't have to pay the 6%, tell them that your gross revenue is none of their business. They typically want access to your books so they can feel good about you paying your rent. In all of our ten stores they agreed that it really was none of their business.
The access and lack of liability is very typically and usually not negotiable.
There is a company out there that you can pay to negotiate your lease. It's about $3,000 but they can save you tons of money over the term of the lease and get you some upfront free stuff. The name of the company is Javelin Solutions. They typically work in the franchise industry but I am sure would be willing to work with you. Javelin Solutions - Home I have not worked with these guys but hear very good things about them.
hey big frog..
i sent u a pm w/ my e-mail to send me the info u had for me..
i also would like to send u a copy of the lease
I talk 2morrow morning with the owners about the lease
so i would like to get prepared
thanx
oh & yes the 6% is in addition to the fixed rent
whats the $10,000 allowance about?
Last edited by Mocha Tees; November 22nd, 2009 at 04:44 PM.
yes kimura i was really looking forward to starting this holiday season..but i'm to the point of as long as the lease is done right then i am done..
i have already missed out on being in there for the holidays but i hope to have many more holidays to celebrate in that location in the future...so i have calmed down.
i cant wait to get to the fun stuff like choosing what color racks or signs do i want to hang, what merchandise to choose to sell in the store, what color flooring, etc
this negotiating stuff is absolutely no fun
opening a tee shirt boutique 
It's OK though... it tells me that you are passionate about what you are doing. 
