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Getting a foot in the door with developers


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FSC Franchise Co., the franchisor for The Brass Tap, pictured above, aligns with developers to get ahead of competitors for sites.

As competition for top real estate locations continues to heat up, franchise groups are finding that forging relationships with developers can pay big dividends when it comes to securing space in new retail projects.

In a competitive arena where a lot of brands are chasing the same types of locations, having a relationship with the owner or developer can give a franchise a leg-up on the competition. Franchise groups don’t necessarily get preferential treatment, but establishing a relationship and a track record is a definite advantage.

“It is great to have a developer that really understands us, our concept and our ability,” says Peter Petrosian, chief development officer at Tampa-based FSC Franchise Co., which is the franchisor for The Brass Tap and Beef ‘O’ Brady’s restaurants.

FSC Franchise has worked to establish relationship with developers such as WP Glimcher Inc., which owns nearly 120 shopping centers. The two companies have done several deals together for Beef ‘O’ Brady’s and The Brass Tap locations at WP Glimcher properties around the country. The informal arrangement relies heavily on WP Glimcher understanding the concepts, and what locations work for the company.

“One of my responsibilities at Workout Anytime is cultivating relationships with landlords,” says Randy Trotter, vice president of development at Atlanta-based Workout Anytime.

“So, when they have 6,000 square feet, hopefully they are thinking about Workout Anytime and our history of paying rent and being a good tenant,” adds Trotter. The company typically occupies 5,000 to 7,000 square feet and prefers locating at grocery-anchored shopping centers with good visibility.

Relationships help get landlords more interested in the concept. In fact, Trotter works with one East Coast shopping center developer and owner who not only wanted to have Workout Anytime in its centers, but also they signed on as the franchisee.

The developer bought 10 initially and has an agreement to do 10 more stores. This particular landlord liked the concept, who didn’t want to be named, and they also knew that it would bring more traffic to their center, says Trotter.

Whether formal or informal, close relationships are a win-win as they help developers fill vacancies and help franchise groups get a jump on the competition in securing good real estate locations. “At WP Glimcher we are all about traffic. So, one of the things that we like is retailers that bring traffic to our projects,” says Paul Ajdaharian, executive vice president of community and lifestyle centers for WP Glimcher.

That relationship helps to give developers a better understanding of the business model. So, not only does the developer know if the concept will be the right fit for a particular shopping center, but they also understand where to position that retail or restaurant tenant within a center to get the best results.

For example, Brass Tap has signed a lease at WP Glimcher’s new Waterford Lakes Town Center development in Orlando that is set to open in October. However, the two companies have been discussing the project for well over a year.

Knowing that Brass Tap was interested in that location early on allowed WP Glimcher to modify the design to make the site a better fit for Brass Tap, such as adding outside seating and elevations to the exterior that fit the brand image. That early collaboration created some added efficiency and likely saved the franchisee some extra costs on the store build-out, adds Ajdaharian.

Rather than knocking on doors to find good real estate locations, one of the biggest advantages of those relationships is having the developer come to the franchisor when they have an opening. In fact, having a good location lined up can help a franchisor make a deal with an existing or new franchisee to open an additional unit.

In other cases, the developer may even talk the franchise out of what could be a bad location for the brand. “The last thing you want to do is promote something that doesn’t work,” says Ajdaharian.

One of the best ways to get in front of developers is by participating in industry events and trade shows. For example, Trotter has been a member of the International Council of Shopping Centers for more than a decade.

Having a track record also helps franchisors get noticed. “I am constantly telling our story, and it is much simpler now that we are over 100 units strong and opening 50 this year,” says Trotter. “It was tough back in the day when we only had 10 or 12 locations.”

Franchisors also need to do their homework on a developer and owner to make sure a relationship will be a good match. FSC Franchise takes that a step further by conducting portfolio reviews for shopping center owner and developers.

One of the keys to building on those relationships is establishing trust. “When we are out looking for retailers and restaurants and service uses for our projects, we are looking for concepts that are not only good for our projects, but we are looking for people we can trust,” says Ajdaharian. WP Glimcher is a long-term owner. So, it is important to fill its centers with people and tenants that will perform over the long-term and have demonstrated an ability to adapt their concepts in a retail and restaurant industry that is constantly evolving.

WP Glimcher also looks for companies that have good infrastructure and can execute effectively. “We are long-term hold guys. So, it is very difficult for us to work with guys that are still trying to figure things out,” says Ajdaharian.

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