FINDING THE RIGHT FIT

How to avoid delays in setting up the premises.

When it comes to fitting out premises, costs and delays can

have a big impact on a new franchisee.

Buying a franchise with a shopfront, be it retail or food, is not only a big investment, but needs careful planning to prevent delays when it comes to a fitout. In fact, says CRS Property principal Myles Snow, fitouts are generally referred to as a categoryone cost in the scope of works.

“They can vary greatly from project to project,” he says, but franchisees can negotiate fitout incentives with landlords for the premises they are considering. Some franchisors will want to undertake that aspect of the negotiation and pass on to their franchisee an agreed percentage of the total contribution.

Snow says planning is integral to avoiding delays. “Proper planning is a fundamental part of scheduling shop design and fitouts.

“This planning is driven by the franchisor and the landlord agreeing on each party’s standard administrative protocols for reaching agreement on critical dates, and scheduling well in advance as to when the fitout period will start.”

Key timeframes include dates for design approval from the landlord’s architect, which could generally take six to eight weeks.

Snow says most experienced developers should have key timeframes in place, but a checklist of timeframes and approval protocols presented as part of a leasing package by the franchisor is a real benefit to the franchisee.

SHOP FITOUT AS BRAND DNA

While franchises tend to share the same brand vision and culture, casual-dining concept Zeus Street Greek ensures each franchise has its own identity.

“It’s very important that each of our stores has its own design identity, but the bespoke elements of the store identity are carefully balanced against the strong Zeus identity that runs through each of our stores,” says co-founder/GM Costa Anastasiadis.

“We believe it’s important our stores fit within their environment but it’s equally as important that customers feel as though they have walked through into a Zeus store and our brand DNA is evident.”

Each community around a Zeus location has its own identity which the store personality needs to reflect, says Anastasiadis.

The design process is driven by Zeus’ design team and partners, with input from marketing for branding and store

experience. The final store designs are discussed with each franchisee.

But how much influence does a franchisor generally have over design?

“Landlords are always looking for quality innovative design, and their decision to choose one franchisor over another could ultimately come down to the overall design and originality of the fitout and the franchisor’s vision,” says Snow.

“However, there are always tenancy fitout design guidelines established by the landlord and their architect that must be followed. These, for example, address such details as signs, shopfront, heights, treatments to bulkheads, and lighting.

“In most cases, a good landlord will have their design team work with the franchisor to encourage originality of retail presentation to complement their own design objectives.”

CUSTOMISATION COSTLY

Snow says custom design can come with costs and delays if not planned properly.

“For example, some developments do not have shopfronts, ceilings or even utilities. For food franchises, slab services will be needed to meet their specific layout requirements.”

In these instances, the franchisor will generally require the franchisee to pay for the changes to the standard layout. “These costs can be quite significant and fall outside the franchisee’s original budget.

“The combined sum of costs to undertake shopfronts, ceilings and partial category-one costs will require a significant amount of capital from the franchisee, and should be fully understood from the outset.”

Proper planning is a fundamental part of scheduling shop design and fitouts

Snow says that in his experience, most fitouts are designed and fabricated offsite then taken to the premises for installation during the franchisee’s fitout period, which is usually a pre-determined, documented four-week period.

It is the franchisee’s responsibility to ensure all tradespeople doing out their fitout works are correctly registered and comply with the requirements of the builder’s contract held by the landlord.

If this key procedure is not followed, in nearly all cases it will cause delays that sometimes can turn into weeks, says Snow.

It is in this critical phase that the landlord’s appointment of a tenancy fitout co-ordinator becomes a critical aspect. That role should include checking that the franchisee’s tradespeople are properly registered to perform the site works.

“I have seen many delays caused by inadequate notice to utilities such as power, water, communications and gas,” says Snow.

“Delays caused by inadequate planning can be costly both in respect of penalties from the landlord, along with missing out on the planned opening date.

“Plan your work, and work your plan.”