Franchise Owners and Involved Parties: What to Expect
Introduction
Congratulations on your new business adventure! If you are reading this, you are the proud new owner of a growing franchise. As you have probably learned, there are many steps on the journey to opening your first location or expanding into new locations. The construction process can be confusing for some, and while you have many resources from your franchise company or business advisors, this guide is intended to assist you in what to expect related to the construction process.
Selecting a Location
One of the most important steps in the franchising process is selecting your store location. Your real estate team in the franchise company or business advisors will assist you in this process, and you should also understand any limitations from the landlord of your unit. To ensure future success and to help understand what will need to happen from a construction perspective, you should also be an active party or be aware of how your store selection may impact construction in terms of options, costs, and timelines. This is important given your space and potential needs in order to prepare the space to meet the requirements of the franchise, the landlord, and of course you!
Some important questions to ask and/or things to consider:
· Am I familiar with the local area where my franchise will be located? Is it located in a busier, popular, or higher-end part of town?
· What is the state of the buildings surrounding my potential unit? Are there several empty units? Do you know the reason prior tenants left? Is it a new or previously occupied unit? Is the area/plaza your potential unit is in well maintained? Does the plaza or area business cater to a higher-end clientele, or one that matches your company’s profile?
· What is the traffic in the area that can pull in “drive-by” or “walk-up” business? Will any of this inhibit your business? Are there any other similar businesses to yours in the same area (meaning potential competition for you)?
· What will your lease terms be? Is this in your comfort zone? Will you be able to receive any “free” months of rent to allow for construction and move in comfortably? Will the landlord (or franchise company) fund or provide any amount for Tenant Improvements ("TI")? Do you have any construction or space use limitations in your lease that will impact construction or your tenancy?
· What will this unit allow for in terms of construction? Does the space itself require much change to the space to meet the needs of you and the franchise company (note: this could drive up your construction costs)? Are all maintenance areas in working order – and who is responsible for maintaining them (note: unexpected maintenance costs, such as replacement or repair of the HVAC, Plumbing, Gas, etc. could result in higher costs during construction).
Needs and Estimated Costs
Construction costs can vary from slight to more significant for your project depending on any number of factors. Construction costs can vary based on the needs of the unit you have leased and the amount of construction needed to bring it up to par, and/or the standards your franchise company has set to outfit your space and be uniform with other franchisee locations. Construction costs can also vary based on your timeline needs. Costs for the below steps can vary based on any number of factors as well.
Common steps in construction
· Architectural Plans and Drawings, Engineering
· Design
· Permitting and communication with local/state government or municipalities
· Environmental surveys, testing, zoning, local building requirements and code compliance
· Job site and equipment needs (major equipment and minor items such as dumpster, job board, restroom facilities)
· Sourcing of subcontractors and supplies/materials
· Demolition and/or Site Preparation
· Masonry, steel, concrete
· Plumbing
· Electric
· HVAC: Heating, Ventilation, Air Conditioning
· Fire systems
· Gas
· Framing
· Roofing
· Drywall and Insulation
· Low voltage
· Painting
· Flooring
· Windows and Glass
· Doors, Hardware, and Trim
· Millwork
· Acoustics or other Ceiling needs
· Equipment, Specialty equipment/Appliances (e.g., Hood vent, commercial kitchen items, grease trap), Security, Furniture
· Finishing touches and Accessories (e.g., Graphics/Signage, Restroom equipment, interior signage)
· Final Clean
Timeline
Setting a timeline and plan for your project is key to a successful build and for your budget. We work closely with all parties involved to establish a timeline that meets your needs and the needs of your business that are in our control. Following the steps from your franchise and builder will help to make this a successful project starting with your franchise arrangement, budget, space lease, plans, permitting, followed by the construction phase. We will go over with you and provide updates on the timeline and plan to help you understand the flow of the construction project and key dates and deadlines needed to stay on track for a successful store opening.