Shopping Centre Freestand Costing

[Connolly]

Hi all,

Girlfriend and I are looking into new business venture and chasing info and advice from those that may be in the know.

We are trying to find approx numbers to lease a freestand stall, similiar size and setup to a Boost bar (being food orientated and relative same sort of size)

Anyone have an idea what sort of numbers would be looking at to lease something of this calibre and things like: lease lengths/ bond deposit/ caveates that exist on this sort of space etc.

Commercial is complete new world to us so hoping to get an insight and make sure is viable before puling the trigger on our idea.


Thanks in advance all.

 

[Truly Exotic]

Give me a msg or call if you want

Have been in hospitality pretty much all my life plus also do Cafe/restauarant consulting as well, plus I know shopping centre leases

 

[Scott No Mates]

Cost varies greatly depending upon the type of centre (regional, sub regional, local), the services required (trade waste, gas, 3 phase, shopping centre operator, location etc.

You will find strict restrictions in the usage clause (eg. canned drinks, no cooking etc) so having a well defined business plan, menu etc.

Lease term - in most states this is controlled by a retail leases act which varies from state to state. Some states give options/first right of refusal.

Core trading hours.

Deep pockets for the fitout requirements - shopfitter, retail designer, cat 1 costs, tenancy coordinator, design review, da/cc.

 

[Peterw]

I would have thought that the people who manage the franchise system, would be able to assist with that information, as well as advice on recommended locations.

 

[Connolly]

I would have thought that the people who manage the franchise system, would be able to assist with that information, as well as advice on recommended locations.

Hey Peter, we are not looking at a franchise. Boost was just a picture to give readers an idea of what it is/ size etc we are wanting details on

 

[Connolly]

Cost varies greatly depending upon the type of centre (regional, sub regional, local), the services required (trade waste, gas, 3 phase, shopping centre operator, location etc.

You will find strict restrictions in the usage clause (eg. canned drinks, no cooking etc) so having a well defined business plan, menu etc.

Lease term - in most states this is controlled by a retail leases act which varies from state to state. Some states give options/first right of refusal.

Core trading hours.

Deep pockets for the fitout requirements - shopfitter, retail designer, cat 1 costs, tenancy coordinator, design review, da/cc.

Scotty- good **** on your reply mate. Good info in there. thanks for taking the time to get it down. How deep these pockets need to be you think? ie; wouldnt be worth pursuing unless had $60k, $100k or $150k to play with.

 

[chilliblue]

Costs depend on

- the centre and its rent and associated fees
(note that some leases I work on have a minimum 6 or 12 month bank guarantee requirement)

- whether there is an existing fit out and if one needs to be done or updated

- purchase of stock and equipment

and much more as Scott detailed.

Lease terms again depend on the centre. Some will do 3 years initial terms, other 5 years. Some may not give you an option, others will.

These are all variables that you need to sit down and start researching as no one can give you a definitive.

 

[Scott No Mates]

Scotty- good **** on your reply mate. Good info in there. thanks for taking the time to get it down. How deep these pockets need to be you think? ie; wouldnt be worth pursuing unless had $60k, $100k or $150k to play with.

There are many things that need to be considered when getting into a franchise (don't just throw all your redundancy payment at the first one to pop up).

Well proven franchises can require major capital investment eg: McD, Jamaica Blue, Gloria Jeans etc as the franchisees pay for the fit out, equipment, design fees, franchise fee, rent, products through nominated suppliers etc. (McD is a very successful property developer with a pipeline of willing tenants wanting to sell their branded products, thus returning profits to the business at various points).

Quality franchise systems can be expensive as they provide high levels of support whereas the cheapest ones basically give you a manual and very limited support.

Minimum lease requirements are governed by the retail leases act in most states. In NSW the lessor must offer a minimum term of 5 years but up to the tenant if they want less and no compulsion for the lessor to accept less than 5 years or to offer options.

A retail tenancy advocate is your best bet if the franchisor doesn't do much for the site selection or lease negotiations.

 

[TMNT]

If you have to ask how much a McDonald's franchise is or how to get one, I'd say you can't afford it, nor would be approved for it........ I went in thinking I was choosing them, but they are choosing you! They say jump, and you say how high! Plus I couldn't afford it by about a digit anyway!

 

[Scott No Mates]

If you have to ask how much a McDonald's franchise is or how to get one, I'd say you can't afford it, nor would be approved for it........ I went in thinking I was choosing them, but they are choosing you! They say jump, and you say how high! Plus I couldn't afford it by about a digit anyway!

He's after a juice bar so the McD price tag, systems and 12 months of unpaid training won't come into the equation. (I know several people who have gone through the system).

 

[SamL]

He is not looking at a franchise though but rather setting up his own gig from the sound of it so the franchise stuff is a bit of a moot point.

 

[Scott No Mates]

Going in green just adds to the risk. Any of the major retail landlords just love them (maximum rent, no bargaining power, big bank guarantees & personal guarantees, no idea, compliant with all requests from lessor/designer/shopfitter etc).

 

[Connolly]

He is not looking at a franchise though but rather setting up his own gig from the sound of it so the franchise stuff is a bit of a moot point.

Haha nice one SamL. Yes as first post read- NOT a franchise. I just used Boost to provide an idea of space context of business etc.

Scott No Mates- mate anyone starting a business in a centre is going to be green without experience. I've had businesses out side this context previously. If not willing to have a crack then then nothing gets done. Experience can only be yielded through poor judgement and piggy backing on those that have been there. Hence the initial thread

 

[chilliblue]

I think that it's great that you are trying to get as much information as possible as sometimes franchises are not all what you may expect.

With regards to establishing what you are thinking all you have to do is calculate your figures on set up and running the business excluding the rental expenses and take note that the centre's are seven days a week with extended hours.

That way, if those figures are acceptable, then you can look at where to set up. Unfortunately the variants between centres (and even internal of those centres) will significantly vary as it will with the length of lease, etc.

Best of luck with your endeavors.

 

[Macca]

Haha nice one SamL. Yes as first post read- NOT a franchise. I just used Boost to provide an idea of space context of business etc.

Scott No Mates- mate anyone starting a business in a centre is going to be green without experience. I've had businesses out side this context previously. If not willing to have a crack then then nothing gets done. Experience can only be yielded through poor judgement and piggy backing on those that have been there. Hence the initial thread

How about acting like a buyer and doing the rounds of existing kiosks in centres that are for sale. It is possible you may find one that you can see value in and buy it so not a complete waste of time.

All the numbers will be available, they may not be accurate sales but the rentals and leases will all be available and would help you establish a ball park figure for both.