Top Tips to Help You Find the Best Location and Negotiate the Best Lease
Looking for the best location for your fitness studio can be one of the most amazing times of your life. Just think, this is going to be your home away from home, a place where you will be changing lives and creating jobs in your community AND doing all this good while making your own money.
Just hearing that should prove to you how important the research is, so the best advice to give you is to be patient, don’t over-think it and don’t rush into a bad location just to get your business started!
To ensure that you get the best location for your business, ask yourself a lot of questions:
> > What do you want out of your dream location?
> > What are the most important things that you both NEED & WANT out of this location?
> > How much can you afford to pay per month for your lease?
> > Do you have clientele already? If so, where do the majority of them live?
> > Do you want to be in a standalone building or do you want to be in a complex with multiple businesses?
> > Would you prefer to be in a small strip mall? A big retail center? A Warehouse? An office space?
> > How much parking do you need?
> > What’s your target market and how close do you want your studio to be to their homes and/or places of employment?
> > Do you need window advertising?
> > Do you need open space?
> > Do you want your studio near a local park or school so that maybe you can utilize their outdoor space?
> > When your business grows, will you have ample space to accommodate the growth or will you have to move?
> > Do you prefer to move into a building that has everything that you need or are you willing to sacrifice a few things by taking a location that works for you but needs a lot of work to be done to the inside?
> > What side of town do you prefer to be on?
> > Demographically where is the most competition in your town? Where is the least amount of competition in your town?
This list can truly go on and on so don’t over-think it to the point that you can’t make a clear decision. But definitely make sure that you put the necessary amount of thought and consideration into making the “right” decision for yourself. Just keep reminding yourself how exciting a time this is for YOU. Because then when you do that, guess what? You find your dream location that maybe took you weeks, months or possibly even years to find. Your patience and thoroughness has paid off and you immediately begin to imagine packed classes, a strong and qualified staff working for you, and a gym fully decorated to your exact specifications.
The building is not yours to occupy—yet.
There is probably a big sign on the outside of your dream location listing the contact information of a commercial real estate agent. This is the listing agent who will help you lease the space. If this is the first time you’ve gone through this process, it can be quite daunting, but it doesn’t have to be—preparation is key. The more prepared you are, the more confident and relaxed you can be throughout this entire process. With that in mind, here are three essential tips for successfully negotiating a lease for your future fitness facility:
1. Find Your Own Agent OR Legal Representation – A common mistake many people make when leasing a building is to allow the listing agent to handle the entire leasing transaction. The listing agent was hired by the landlord, which means that his or her number one priority is to protect the landlord’s interests—not yours. You need to hire someone who will protect your interests, rather than trying to represent both sides. If you don’t know any local commercial real estate agents, ask friends and colleagues if they can recommend a reputable commercial real estate agent who can represent you. Another option is to hire legal council to help you negotiate your lease. If this is not your first lease and you feel confident in the leasing process, hiring legal counsel instead of a commercial real estate agent could prove to be a great negotiating tool between you and the landlord. Because you’ll be saving the landlord commission fees by hiring legal counsel instead of a commercial real estate agent, he or she may be willing to accommodate more of your requests.
2. Have a Solid Letter of Intent – The purpose of a letter of intent is to make all of your requests known to the landlord. While you’re unlikely to get every single thing you ask for, this is the time to ask for everything that you want for your potential new fitness facility. Don’t be timid because you never know how desperate the landlord might be to lease this vacant building, which means that they may be more willing to accommodate your requests. You can ask for things such as free rent for a year, reduced rent for a certain number of months, freshly painted walls, assigned parking spots, new carpet, an elevator, new windows, etc. Ask for anything that you think would improve the building for your fitness location. In the letter of intent, you also need to specify the proposed terms of the lease such as:
- 4 Year Term ($2.00 per square foot – NNN OR Gross Lease) with (2) 4-year options
- Annual CPI Capped at 2 to 4%
3. Think Win-Win – When negotiating a lease, always think win-win and never be greedy. Your potential landlord will expect you to ask for a lot during the negotiation process, but you shouldn’t expect or insist on getting everything that you ask for. Make one list of things that you WANT and another list of things that you absolutely NEED for your fitness facility. Your landlord may agree to all eight of your needs, but to only two of your 10 wants. If this is the case, do you agree to those terms or do you walk away because you didn’t get everything that you requested? Only you can decide, but at the end of the day, only sign a lease that you fully understand from front to back and if you feel 100 percent confident in the decision.
Remember, everything in a lease is negotiable. By following these tips, you will be much more prepared to ask the right questions when hiring your representation and successfully negotiating a lease for your new fitness facility.
About the Author
Mike Z. Robinson is the owner of the highly successful personal training facility, MZR Fitness as well as Mike Z. Robinson Enterprises which features & highlights a myriad of options to help fitness professionals grow their businesses and careers. Mike was the 2015 IDEA Personal Trainer of the Year, is the author of the E-Book: “Fitness Up, Everything Up”, and he is also a Media Spokesperson for both the American Council on Exercise & IDEA Health & Fitness Association.