Whether I’m speaking one-on-one by telephone with a tanning salon tenant – or to hundreds of tanning salon tenants at a convention, these are some of the many questions I am asked about leasing commercial space:
Q. The operating costs for the building I have located my salon in keep going up and up each year. What can I do about this?
A. When I negotiated a lease for a tenant some time ago, I capped the operating costs at a maximum 10 percent increase. I wanted to cap it at 5 percent; however, the landlord only agreed to 10 percent. A few years later, I received a kind letter from my client saying that this one clause alone had saved her more than $16,000, as the operating costs had skyrocketed! If you are in the middle of your lease, you can call for an operating cost audit (you can cooperate with your neighbors to have this done), should you feel that the landlord is messing with the books. However, if the increases are legitimate, you may simply need to factor these into your renewal negotiations.
Q. I am planning to open a new tanning salon. How do I choose the best location?
A. For tanning tenants, you will require a location with high visibility (to both walk and drive-by traffic), good accessibility and prominent signage. In some cases, it is easy to pick a great strip mall for your salon location – but, if your salon is buried in the back, you may be at a disadvantage. Also, in determining where your salon should be, try to evaluate where your competition is situated. Ask yourself why this site was chosen and whether they are doing well. Locating close to major anchor stores is often important to the success of tanning salon owners. Just remember to confirm if this anchor tenant is planning to stay or go; plus, question other tenants in the building as to how they are doing.
Q. I want to look into leasing another location for a second salon. Is it okay to let a realtor I know look around and make inquiries for me?
A. I don’t recommend this. The best way to do site selection for your new salon is to call the listing agent directly for each building. By calling the “For Lease” number on the building, you will avoid commission-splitting between realtors; commission-splitting will make your tenancy less desirable to them. Furthermore, by dealing with the listing agent on each site, you will receive more timely and knowledgeable information regarding the property and the commercial unit. Remember, realtors are employed by landlords; their job is get the landlord (rather than the tenant) a good lease rate.
Q. What questions should I be asking during the lease negotiation process?
A. Who has recently moved into the building? Who has recently moved out, and where to? Is the building for sale? What is the management style? Are the landlord and property manager both located locally? Are some tenants leasing month-to month or not planning to renew? Tanning tenants should start with questions like these; one question will usually lead to another. Your objective is to gather information.
Want to see your leasing question answered? E-mail dalewillerton@theleasecoach.com and watch for the answer on LookingFit.com!
Dale Willerton is “The Lease Coach” and a certified lease consultant who works exclusively for tenants. As an ITA member, The Lease Coach has spoken at many North American tanning conventions (including three times at the World Tanning Expo in Nashville). Willerton is the author of “Negotiate Your Tanning Salon Lease or Renewal.” Call him at 800.738.9202, e-mail dalewillerton@theleasecoach.com or visit www.theleasecoach.com.
