Poor Location Can Sink a Salon

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By Dale Willerton

One of the most effective strategies to conducting site selection is not by looking for the proverbial needle in a haystack – but instead, by using the process of elimination.

One of the most common reasons for a tanning salon failure is due to a poor location. A poor location ultimately results from poor site selection. How else can you explain that identical salons from the same chain or franchise system will vary as much as 200 percent in sales volumes? Of course you will need to factor in store size, marketing budgets, management and so on; however, these are all secondary to the importance of location, in my opinion.

In my book, “Negotiate Your Tanning Salon Lease or Renewal,” I dedicated an entire chapter to site selection. Here are just a few relevant tips:

1) Allow enough time so that you’re not making decisions under pressure. Typically, for a new salon, you should start the site selection process six months or more in advance of when you want to open. If you find a prime location, usually the landlord will hold it for you for a few months. However, if the process takes longer, you may need several months to finalize the Offer to Lease, review the formal lease documents and/or build out the store.

2) Don’t let a realtor show you space all over town. Tanning tenants often fail to realize that realtors / agents / brokers typically work for landlords who pay them a commission on lease deals signed and closed. When one agent shows you another agent’s listings, this will effectively create commission-splitting between the property’s listing agent and the leasing agent (meaning you could lose the location to another tenant who contacted the “listing agent” directly). This may also undermine your negotiating power since the landlord’s real estate agent will know how you feel about every location. A realtor may be very helpful in pointing out a location you were unaware of, but remember who they are working for. While their advice may be sincere, it may be sincerely wrong.

3) Make your leasing inquiry by calling the “For Lease” number on the property sign. This way, you will meet and negotiate with the listing agent directly. Tour prospective sites in order from worst to best based on curb appeal. This way, you will become more confident, ask better questions and be more in control of the leasing process.

4) Don’t telegraph your intentions by giving buying signals. Ask the leasing representative to e-mail you preliminary information before you agree to view the space. When viewing, stifle the urge to think out loud; subtle comments to a partner/spouse and overheard by the leasing representative can work against you. If you’re asked how much you have budgeted for rental payments, remain vague. Not every question asked deserves an answer – not yet, anyway.

If you find yourself weighing a better location at a higher rent versus a lesser location at a lower rent, my advice often is to go for the first option. When consulting to tenants and doing site selection, my job isn’t to find the cheapest location, it is to select a site that will help the tenant maximize his or her salon sales.

Tanning tenants need to know there is a great deal more involved with the site selection process than just what is explained here … these pointers are just a few tips of the iceberg.

Got a leasing question? Like a complimentary copy of Dale’s CD, “Leasing Do’s & Don’ts for Tanning Salon Tenants?” E-mail dalewillerton@theleasecoach.com to see the answer in an upcoming Looking Fit article.

Dale Willerton is The Lease Coach – a lease consultant who works exclusively for tenants. As an ITA member, Willerton has spoken at many North American tanning conventions and will be presenting at Smart Tan Downtown (October 14 – 16, 2011, in Nashville). If you would like to meet and speak with him at this show, please e-mail dalewillerton@theleasecoach.com . Willerton wrote “Negotiate Your Tanning Salon Lease or Renewal” and can be reached at 800.738.9202, or visit www.theleasecoach.com  or www.helpuleasetanning.com for more information.

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