Navigating through the site selection process to find the right location and negotiating with landlords to get the best lease terms for a franchise is critical in setting your business up for success. In this episode, the expert on retail real estate shares his trade tips. Joe Dougherty has spent over a decade helping retailers and franchise owners find the right location for their business. He is a partner in one of the largest retail commercial real estate firms in the Mid-Atlantic and has a firm ear to ground on the retail market. Tune in to this episode as he shares some best practices for working with brokers, landlords, and other nuggets. Don’t miss out on this episode and hop into the Franchise Masters!
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How To Find The Right Location For Your Franchise With Joe Dougherty
In this episode, I am joined by a personal friend whom I have known the longest in my life. His name is Joe Dougherty. Our life has come full circle because Joe does a ton of work in the commercial real estate world. He has a partner in a firm. These guys are leasing up buildings all around the middle of the country and all kinds of stuff. Joe, welcome. How are you?
Thank you for having me. I really appreciate it. I feel honored.
We’ve come a long way since Geneva, haven’t we?
A long way. I was thinking it was 3rd or 4th grade, I remember seeing you on the bus when you moved back finally.
Our dads worked together in DuPont, so we always moved around a bunch. We spent a bunch of time together in Geneva, Switzerland. My family bounced around and then we ended up back in the Chadds Ford, Kennett Square area. That’s where Joe and I reconnected in school. However many years that is from now, here we are on a show.
Joe, tell us a little bit about what you’re up to, what your firm does, and all that good stuff.
I work for a company called Metro Commercial Real Estate. We are a retail third-party brokerage company that handles both landlord, retailer, and tenant representation. We do property management. We do development and development consulting. The firm itself has been around for many years. It started in Southern New Jersey and has now grown. We now have 4 offices and about 75 to 80 employees. Thirty of which are brokers like myself. We have offices in Southern New Jersey. I’m in a Pennsylvania suburban office outside Philadelphia. We have an office in Downtown Philadelphia. We just opened up a Miami office not long ago, which is exciting. We have a bunch of guys and girls down there working on brokerage and development and things like that.
It’s super exciting. Our main focus is to represent over 200 retailers and probably have over 400 to 450 properties or landlords that we represent. We manage about 7 million or 8 million square feet in Pennsylvania, New Jersey, and Delaware area. Those retailers that I mentioned, they’re everybody from your Target, Lowe’s, and PetSmart of the world to the local franchisee or local operator in our market that owns a couple of restaurants or a couple of retail storefronts. I tell people years ago, the retail definition changed. We’re also doing self-storage operators, senior living operators, working with apartment developers, car dealers, and everything above. Retail is not just the true shopping center that you see pop up in suburbia. It’s changed a lot.
If somebody needs a physical location, you guys have a pretty good ear to the ground on whether it’s somebody trying to find a location or a landlord that has an opportunity or a vacancy.
On the landlord’s side, we’ll lease a million-square-foot power center anchored by multiple anchors like Target, Lowe’s, Giant, Best Buy, whomever, or we’ll take that free-standing building along a highway or a piece of land along a highway, half an acre, an old gas station, an old Kmart, or whatever it is. On the retailer’s side, if somebody is interested in opening up a new retail storefront, that’s our bread and butter, especially in Pennsylvania, New Jersey, and the Delaware area. Although we do represent a bunch of retailers in the entire country and the entire East Coast. We go up to Canada and we’ve even gone down to Puerto Rico. We can do retail expansion all over the country for a retailer on that front.
From skiing in the Alps to real estate mogul. Joe Dougherty, welcome. I know it’s awesome.
I ski in the Poconos now, Dru.
You guys get real snow up in the Poconos. We get a hybrid of ice and stuff here in the North Carolina mountains. For anybody reading who’s either a young emerging franchise company that has a physical location and them helping navigate through the site selection, helping their franchisees navigate through that to actual franchise owners who are out there looking for locations that are going to fit their business and whatnot. You have a really good ear to the ground in terms of what the current climate is. I call Joe every few months and I’m like, “What are you hearing? What are you seeing?” It’s been an interesting ride since COVID, right?
Have things slowed down since COVID started? What’s the pulse?
Quite the opposite. When COVID hit, that was mid-March 2020, things came to a screeching halt. Tenants were focused on trying to figure out rent concessions and the operations of their business that they were shut down. They were concerned about being able to pay their rent, all their bills, their employees, etc. Landlords were concerned immediately with getting those flood of phone calls. If a landlord has a couple of million square feet in their portfolio, they could have hundreds of tenants, if not over a thousand different tenants. They’re getting flooded with phone calls from these tenants saying, “I’m not open for business. They shut me down. I can’t pay my rent, etc.”If a landlord has a couple of million square feet in their portfolio, they could have hundreds of tenants, if not over a thousand different tenants. Click To Tweet
Obviously, landlords have to pay their bills for the shopping centers to keep them up and running, and they have mortgages they need to pay, etc. It was a stressful time for tenants, retailers, and the landlords on those properties for those first couple of months. That probably continued into the summer and the fall.
Once things started getting reopened and those tenants’ retailers adapted, whether they were allowed to be open or adapted to their business model. For example, the restaurants with the takeout and the curbside pickup, and things like that. We started to see an increase. Into early 2021, there was a lot of pent-up demand for expansion because some of these retailers and restaurants started doing really well. The consumer was buying differently the way they would go by, whether it was curbside, getting it delivered, or ordering it online and picking it up, walking into the store, and grabbing it. 2021 was super busy, and even into 2022.
We’re actually seeing now a lack of retail space, especially quality retail space. COVID delayed a lot of new ground-up development and that has created a lack of space available because we don’t have a ton of huge projects or even small projects getting built. Things are still going through that pipeline of the COVID delays. Now we have construction delays and construction costs. COVID was a scary time for everybody, but we came out of it busy. A lot of people are looking to open up stores and we continue through that. Even into 2023, everybody is concerned with the recession, we still are seeing a lot of activity on our end. It’s positive.
I would think you guys would be an interesting leading indicator with all of the stuff you hear in the news about whatever is going on in the economy. Opening new locations is probably one of the first things that regional and national change start to pull back a little bit. You’re not seeing any of that? Companies are bullish?
We’re seeing a little bit of it over the last 60 days maybe, not widespread, but the publicly traded companies are looking ahead and looking into their business specifically. Also, how could that change if the economy does go into a recession and the consumers’ spending habits change? I can’t say we are not seeing it because we are, but it’s not super widespread at this point.
Retailers are still saying, “Instead of wanting to open this at this date, maybe we’ll push it six months and open it a little bit later.” That’s what happened with COVID too. Don’t get me wrong, tenants did get out of leases and terminate leases and whatnot, but we had a lot of them get pushed out. Instead of opening in late 2020, they opened up in 2021, and things like that. The activity has still been strong going into the holidays, over December 2022, and into early January 2023 is always a slow time.
You mentioned that the lack of quality retail centers hasn’t kept up with the demand and some of the growth. How would you define a quality retail center? What goes into that, in your opinion?
When I started in this business, the client we worked with was a bank and it was drilled into my head the location. In retail, location is so important for your business specifically. Depending on what your business is, that’s going to drive your location. If you think about retail and a shopping center, if you are in one shopping center that is anchored by a higher end of retailers, your business might be higher end. Across the street, there might be a shopping center that has more discount-oriented retailers.Location is important for your business, and depending on your business, that will drive your location. Click To Tweet
If you are a higher-end tenant that is looking for those types of tenants, it’s important for you to be in that center with the right co-tenants. If you’re in the wrong center, that could be detrimental to your business. It’s different from an office building. For an office building, if you’re on one side of the street, the other side of the street, or down the road a little bit, even so with an industrial building, your employees, in theory, will still have access to the highways.
For retail, it’s location, access, visibility, co-tenancy, the surrounding demographics, where the shopper’s coming from, their shopping patterns, their driving patterns as it relates to and from work or school, or whatever it might be. It’s interesting to see that you literally could have one center right next to another, and you could have a difference in rent per square foot by $10 or $20, or $30 per square foot. It’s quite amazing.
The landlords are very intentional in how they lease and what types of companies they lease to.
They do the best they can.
How does a landlord evaluate if a potential tenant’s business is the right fit for a higher-end shopping center? What do they look at typically?
They’re going to obviously want to know if it’s a multi-tenant operator or a multi-tenant chain. They’ll want to go and check out some of the existing stores if they’re not familiar with them. They’re going to ask, who’s your typical customer? Who’s your shopper and your hours? What type of volumes or how much traffic do you anticipate? That’s a part of it.
If you’re a restaurant and your busy times are lunch, happy hour, and dinner, that is different than if you are a breakfast-operator restaurant that’s open from 7:00 to 2:00 with no liquor license. A gym, for example, whether it’s a large gym or these smaller format gyms, their busy times are early in the morning and right after work. You’ve got to be cognizant because the convenience of parking is a big driver for retail. If people can’t find parking or people can’t get to you conveniently, then they’re going to drive past you and go to the next guy.
If you’re representing a franchise owner going to be opening a high-end boutique fitness type of business, do you present the brand and the business to the landlord, or do you help the franchise owner present that business to the landlord?
I actually have a call with a group after Thanksgiving here with somebody with a couple of locations. What we’re going to talk about is if they’re looking for 2,000 to 3000 square feet, something like that, it’s important to get a broker and get them involved early. We do present the brand or concept to the landlords. We’re that connection point between the tenant and the landlord.
Generally, most times, especially if it’s in our backyard, we have relationships or we know these owners very well. The longer we deal with them, the longer we work together, and we probably worked with them in the past, whether it’s in that center or somewhere else. If an operator says, “I want to be in Philadelphia County and I want to be between this street and that street.” That’s a very finite area. We go out and contact all the landlords, whether it looks like there’s available space or not.
We don’t just go online and look at CoStar, LoopNet, Crexi, or anything like that. That is a tool, but it’s not the end-all-be-all. You get in the car, you drive, and you call these owners and see. You never know who might be struggling in any of these centers. If it’s a new fitness concept or a new restaurant concept and an owner’s not familiar with them, it takes a sales pitch. A website helps and any type of marketing collateral that we can send helps. Oftentimes, a lot of these franchises will have marketing collateral for landlords, outlining with the businesses, and things like that.
We take care of all that. I can’t stress it enough to get your broker involved early. A broker, in theory, does not cost a franchisee or a tenant any money. We get paid our commissions from the landlords. You’re not going to pay any more rent because you have a broker involved. That’s not how it works. You want somebody advocating on your side through this process because there are a lot of nuances through the process that can fall through the cracks. If there’s a problem, you want to be able to look back because the end-all-be-all is your lease agreement with the landlord.
I hear it sometimes with folks whom I help get into any kind of franchise that has a physical location, “I can just go on LoopNet and see what’s available.” I’m like, “You could probably get a sense of what’s available, but there’s a whole behind-the-scenes world that these brokers and landlords communicate and have access to that you don’t have access to.” Don’t just get hooked up with any broker. You want to get hooked up with the good brokers that have these key relationships with the landlords and whatnot.
A good broker will know not only the landlord. They probably have a relationship with them but they’ll know what’s going on in the surrounding marketplace, in the center, competitive rents, what are market rents in the area, and what activity or what else is going on. I can’t stress it enough because we see it all the time. A retailer might go out and do some stuff on their own and then try to get their broker involved later in the process. In some cases, it doesn’t turn out well because there are things that they could have gotten had they had somebody on their end advocating for them.
When I’m working with somebody who’s new or just bought a franchise that has a physical location, there’s the one part of the process you can’t control as a franchise owner and you have to buckle in because you don’t know what it’s going to be like. You can’t control what’s available on the market in terms of the types of spaces that fit the criteria that you want to have. It could be 3 or 18 months. Once you make that decision on signing a lease for a location, you’re fixed. You can’t change it.
It’s one of those things that you want to buckle in and get ready for some patience because it’s not something you want to force, which is a no-dust statement. As a new franchise owner, the emotions are so high. Even buying a franchise is a total emotional rollercoaster. If you sign the agreements and you’re a franchise owner, the first thing you need to do is look at some potential sites. Sometimes, it can be a little bit of a punch in the gut if there’s nothing out there that fits what you’re looking for.
For an expectation standpoint, definitely you hit it on the head. It could take 3 months or 18 to 24 months to find a spot. As you said, you can’t control what’s available or what’s coming available. Maybe the center you want to be in, nothing is coming available for another 12 or 24 months as far as lease expiration. That tenant has an option and the landlord says, “I won’t know until twelve months for now as we get closer.” You may get closer to twelve months, and the existing tenant says, “I’m going to stay.” Now, you just wait twelve months to get into that center and there’s still no availability.
I would recommend patience. It’s a fine line. You don’t want to settle for inferior real estate necessarily, but you also don’t want to wait forever for that one spot because it could be ten years for that space to open up. The franchisee, the tenant, or the retailer has to know and understand their business and whether or not they can be successful in a certain area or center.
I’m going to put you on the spot a little bit because I had a random question pop into my head. I know we’ve talked about this a little bit in the past with Planet Fitness and stuff like that, but I am curious. As it relates to your work with franchise owners and organizations, what are some of the franchise brands that you and your firm have done the most amount of work with? A little bit of an indicator in terms of franchise brands that are growing, taking down leases, opening locations, and all that kind of stuff.
Over the years, we’ve done Planet Fitness. The swim schools and car washes are super active. We’ve done a bunch of the Urbanears and some of the Unleashed brand’s work. On the restaurant side as well. We’re active with Wendy’s. We represent a lot of owners so we get a lot of phone calls from other brokers that represent franchises. You’re seeing a lot of the other franchise or corporate restaurants super active right now.
Popeyes is probably a good example. It’s active in our area from a franchise fast-food standpoint. Raising Cane’s is corporate. We don’t represent them, but they are very active. They’re new to our market. Chick-fil-A is still active. Freddy’s is another fast-food franchise that’s active. Burger King is active and all the food guys are. That’s a COVID drive-through thing that has caused a lot of that activity and competition in that market. I mentioned the car washes. Some of them are franchised, and some are corporate but they are super active in the next 12 to 24 months. All over the country, there’s got to be a lot of car washes that popped up.
There’s a ton of PE money moving into car washes. They’re selling these unlimited memberships and owning the real estate. Do you see the car washes buying the real estate or leasing the real estate?
A little bit of both. It depends. In our market, it’s hard to buy quality real estate without frankly paying an arm and a leg for it. We have a lot of ownership groups that are local longtime owners that don’t sell a lot of stuff. We have a lot of publicly traded, REITs, and large private owners that don’t sell stuff. If somebody says they have to buy, the problem is they might not be a lot to buy or it’s going to be so expensive. It’ll be cost-prohibitive but we see a lot of ground leases also in the car wash world. It depends on the group, the private equity, and who it is.It's hard to buy quality real estate without paying an arm and a leg for it. Click To Tweet
You guys get to know the company and the customer, whoever they are, how they roll, what they’re looking for, what their goals are, and help them navigate through all that stuff.
Some operators will say a purchase only. It could be a corporate operator, a publicly traded company, or a large private company. Others will say, “I’ll purchase or I’ll lease, but if I’ll lease, I will only do a ground lease,” which means they’ll lease the ground and they build their own building. Others will say, “I’ll lease, but I need somebody to build the building for me.” Build the suit essentially is what it’s called. It depends on the model or the tenant, what their threshold is, and what they prefer on their end. Some like to control the construction. They can control the timeline, the price, etc. Others say, “I don’t want to do that. I’d rather have a landlord build it for me or build it out for me and give me the space. I’m willing to pay a little more to have that.”
K9 Resorts is a company I don’t think we’ve talked about, but you probably know about them. They’re starting to make some big waves. They’ve got some Planet Fitness franchise owners involved and some big hitters. I’ve worked with some family office folks like private jet money, and they have a hard time processing the whole ground-up lease thing to where you’re not going to own the building and the dirt, and you’re going to spend a lot of money to upfit this thing.
They’re like, “I don’t get it. Why wouldn’t I own both?” The costs are going to go up, but it makes sense in the cashflow of the business and how it works. In a way, you are creating an asset. It’s not the building, it’s the business. If you wanted to sell it down the road, assuming that you can make this thing profitable and successful, people are going to pay you some multiple for that goodwill of the cashflow that the business is generating, not just the physical real estate. It’s interesting how some folks have a hard time processing that.
Some of these tenants say they only want to own the real estate. We’ve seen it happen before. At the end of the day, they own a ton of real estate and they’re operating their business out of it. Who knows what the long-term play might be, but maybe it’s to sell the business and do sale-leasebacks. Now they’re getting cashflow from rent from all of their old locations.
There are a lot of different options, but on the lease front, that is more common because not everything is for sale, especially shopping centers that are operating and income producing. I would imagine that there are probably tax benefits on the leases and the buildouts. You can depreciate certain things and stuff like that. We certainly see more leases than we do sales on the end user side at the end of the day.
Switching gears a little bit. Let’s go back to, “I’m a franchise owner.” I’m going to be opening a boutique fitness franchise or a beauty franchise. It’s like a high-end thing. Let’s say we have a couple of options of potential locations that we like and we want to go after these two locations. What does the process look like from the time that you identify some locations that fit your criteria to securing the lease?
Let’s say brokers presented you with half a dozen locations. You and your broker talk and figure out exactly the parameters of what you’re interested in. The broker goes out. Two weeks later, a week later, or whatever comes back and says, “In this area, I found these half dozen locations.” They’ll send you a tracker, the brochures, and site plans. They’re like, “Here are the rents.” We’ve whittled it down now to 2 or 3 like you said.
At that point, we would draft a letter of intent or a proposal for that location. Sometimes the tenants will have templates. If it’s a franchise, the franchisor might have a template for them to use. If it’s a corporate tenant, they might have their own template that they like to use. In some cases, they don’t have templates and we have tons of them, and we can modify them however it’s needed. A letter of intent or a proposal will outline basic business terms. It’s 3 or 4 pages long typically. That proposal is going to outline everything from who the tenant is, which is the concept. A landlord is going to want to know who’s signing the lease. That both includes the entity signing the lease but also the people signing the lease.
If it’s a corporate company or publicly traded, that’s easy. It’s on the stock exchange. If you’re getting the public entity on the lease, most landlords, that’s what they want or their number one choice. If it’s a franchisee with multiple locations like 5 or 10 locations and their entity all rolls up to one parent entity, that might be good enough to sign the lease. If it’s a first-time operator with 1 or 2 locations, oftentimes, a landlord is going to want to know who is the person that is signing the lease and guaranteeing the lease at the end of the day. We call that a personal guarantee.
Most owners, especially if they’re putting capital into the space, whether it’s demolition, buildout, or anything like that, they’re going to want some type of personal guarantee from the operator and any partners or principals and their spouses, if applicable. That guarantee, typically, the preference from an owner. They’ll ask for the full initial term. If you’re signing a 5 or 10-year lease, they’ll ask you to guarantee the whole thing personally, but that can be negotiated. That’s where getting the right broker is involved. You can negotiate that down and limit your exposure long-term. If you do a ten-year personal guarantee and you’ll have an issue in the third year of the business, that could be a big chunk of change that you have to come out-of-pocket to get out of your lease.
We draft a proposal. It includes the tenant, the guarantee, who’s signing, the lease term, and the rent. We get into the triple net expenses, which are the common area maintenance, the taxes, and the insurance. We try to put certain parameters around those as far as capping how high they can go and how quickly. We’ll get into exclusive depending on your business. If you’re going to want to make sure a competitor doesn’t come in in the same shopping center. We’ll get into that a little bit. There are some other general items in these proposals. They’re very basic and in the structure that once they’re negotiated, you give to a real estate attorney to help negotiate the lease.
You have a decision as a franchise owner. You can go after a big chunk of tenant improvement ask and maybe pay a little bit of a higher rent on a monthly basis. or you can try to reduce the rent on a monthly basis and not ask for as much help on the tenant improvement stuff, right?
Correct. You would put that in the proposal as well. Again, it comes down to the business structure of the concept or what their model is, but also, if it’s a franchisee, maybe what their threshold is. If they come from a construction background, they might say, “I can do it faster, cheaper, and better than anybody else. I’d rather a lower rent.” If somebody doesn’t have that background or those connections, they’ll say, “I need some cash from the landlord. I want the landlord to do some work for them, but I’ll pay a little bit more with that.” Sometimes, you might not have a choice. Sometimes the landlord is going to dictate it. They might tell you, “I don’t have any cash or work that I’m going to do for you. You have to do it all.” That’s all part of the negotiation.
As a franchise owner, if I’m using an SBA loan, how much of the SBA loan will I use for the construction of my own personal tenant improvement to get the shell where I wanted to get to? Am I comfortable paying interest on that money versus paying a higher monthly rate? Hopefully, being able to negotiate a big chunk of tenant improvement money from the landlord. There are all these factors that you look at from my side, as the franchise owner side of things, to figure out what’s going to be the best. You then try to make it happen.
You brought up a good point. The SBA loan process is, if not done before, you start looking or simultaneous. We’ve had people get delayed. Maybe their SBA loan isn’t closed out or isn’t finished, and you might lose the space, especially in a competitive market or area. If we’ve fully negotiated a proposal and are ready to go to lease, or maybe you’re negotiating a lease, “My SBA loan isn’t done. I need 30 or 60 days,” that space might not be there or the owner might not wait for you in getting that figured out upfront. An owner is going to ask all those questions if you have the funding to do this. The last thing an owner wants is to sign a lease with you. If you’re building out and you stop building out in the middle of the process and never open is not good for anybody.
They want you to open and pay rent as fast as possible once it’s go time. I’ve always heard this from so many different people. 1) You have to be patient in figuring out what locations are available in your area. 2) When you start to dance with the landlords and you fire your first bullet on a letter of intent, they might not respond within 24 hours. They’re notorious for operating on their own clock.
The process is not quick. It takes time. If you’re asking an owner to do work inside a space, you send them somebody who’s more sophisticated that might have a landlord work letter, a franchisor that has a landlord work letter, or a corporate tenant. If you send them a 2 or 3-page work letter that says, “I need this electric, HVAC, and this type of lighting or flooring,” they have to go out and get that priced by a contractor to know what they’re dealing with.
That takes time, especially in this market. That could take easy two weeks. It might have taken longer like a month or two months. It’s depending on how detailed that is. Twenty-four hours could happen but be patient because that first offer or bullet, as you said, will also dictate how the response comes back if you’re going in and you’re lowballing somebody.
If they’re asking $30 a foot, triple net in rent, and you say, “Let’s offer $15,” you might not even get a response. There’s a reason and an ask, and landlords put asking prices on it. In general, to be able to negotiate, sometimes they put a price on it and that’s the price, but it’s important. Don’t lowball them because that’ll offend people and you won’t even get a response in often cases.
That’s where you and your team come in. It’s to help guide, especially a first-time franchise owner of a business that requires a physical location. You’re helping to guide me through the process to try to get the best deal possible I possibly can within the realistic realm of what landlords typically are willing to do for the market for where it is. Right now, it had been swinging heavily in the landlord’s favor. It feels like it’s still a little bit in their court.
I agree with you. We’ll see what happens in 2023. It’s market by market. Location by location. We still have stuff that is set empty for ten years. That’s based on location or area. One other thing that popped to mind was also having your financials ready. An owner that is sophisticated is going to ask for your financials. Depending on your business or the entity on the lease, if it’s a true entity with multiple locations, they’re going to ask to see your business financials and your tax returns for the last couple of years for that entity. Depending on how much they dive into them, they might ask for further info on what it says.
If it’s your first time as an operator or franchisee or it’s your second location, they’re going to probably ask for personal tax returns and financial statements. Having all that ready to go. We’ve had people say, “I’ve got to get that together,” and then it takes 2 or 3 weeks. They’ve got to go to X, Y, Z to get copies of their returns or go to the bank and get copies of this. You have something that you’re able to put together, which I imagine for a franchisee. If you’re signing a franchise agreement, you probably had to put all that stuff together anyhow, most likely.
Get ready to open the kimono. You might not have to open it but be prepared if you get asked. You have to have this stuff ready to go.
If you’re uncomfortable sending it to your broker, maybe it’s one of your good friends, family friend, or whatever and you don’t want to send it to them, it’s perfectly fine to say, “Can I send this to the landlord directly?” We won’t get offended. It’s absolutely okay.
All of the stuff that Joe and I are talking about is one of the things that I advise people when they’re looking at a franchise. There are so many layers to getting a good lease and getting the right location with what you do. It’s the same thing as goes into analyzing franchises because there’s always the widget. People judge the widget of what the business offers. A good franchise company that has a brick-and-mortar concept should have a good site selection team that’s also providing guidance to the franchise owners or working with brokers like Joe trying to help navigate through this process. For a first-time franchise owner, it’s a big deal.
When you start getting into some of the bigger franchise concepts that landlords know about, whether it’s Xponential Fitness, Planet Fitness, or Orangetheory, they can get to the point where maybe even the franchise companies or the corporate team has a relationship with some of these REITs and more regional or national landlords where they can get access to locations. Do you see that? Do you see some of these bigger franchise companies get preferred access to sites that are coming on the market compared to small regional franchise companies that the landlords don’t know about?
We have franchise ORS and franchises that we represent on a master basis. We might have the whole East Coast for a concept. For every single franchisee that comes into the system, we help them with their real estate. I’m in Pennsylvania. Generally, if it’s down in North Carolina, we, being the broker, would hire and collaborate with a local best-in-class broker in that region to help us. We’ve figured that all out on our end internally.
You’re right. The publicly traded REITs, we pick up a phone. There’s generally somebody that we can call and say, “I have this concept that wants to be in this market. What do you have?” We do that all the time. Whether it’s at our trade shows, which we have coming up in New York City in the ICSC Convention. We also even do office visits and portfolio reviews. Now, in the Zoom world, it’s super easy to do a portfolio review with these large owners and run through all their locations across the country depending on the parameters that we give them. Definitely.
Do you think you can take this show once it’s published and send it over to Wawa, and then convince Wawa to come down to the North Carolina market? That’s the only thing we’re missing down here.
There you go.
Pack up North.
We got Capriotti’s. They’re opening Capriotti’s down here.
Primo’s is somewhere in Charlotte.
Capriotti’s has the Thanksgiving sandwich.
The Bobbie. Capriotti’s is a family chain that we grew up eating in Delaware and Pennsylvania, but then they got bought years ago by somebody who franchised them. Now, they’re expanding via franchising. I think somebody is going to be opening ten of them here in Charlotte but the bread sucks. They didn’t get the bread right. Jersey Mike’s has better bread than those guys do, but I still love Capriotti’s.
You see a lot of those food chains. Jersey Mike’s is another one. Jersey-based and they’re franchising everywhere, all over the place.
It’s cool to see that you have a good ear to the ground. This has been insightful for me and for a lot of folks. What’s next for you guys? You expanded out of Miami. When do you open your Charlotte office and move down here?
Are you going to be our first broker?
I will help you find franchise clients that want open locations in Charlotte. I can promise you that. What’s next? What are the plans for you and the firm?
We’re continuing to grow. We have an interesting model. As far as bringing on new brokers, we’ve done a lot of our growth with new brokers with very limited experience or no experience. We come and train them. They team up with 2 or 3 people and mentors. They work with you for a year and learn everything. What we do is there’s no textbook. I have my real estate license. We all have a real estate license. That’s more geared toward residential real estate. There’s no textbook or course to tell you what we do every day outside of doing it.
Every day is different. That’s part of what I love about doing what I do. I work with a lot of awesome people. I have a lot of great clients that are good to me and have been good to me for years. I talk to and meet a lot of different people and all different types of personalities. It’s a lot of fun, but it’s like any business, it’s cyclical. It comes up and down.
I’ll tell any tenant, “You might work on multiple transactions.” It’s like buying a house right now. You might work on multiple locations and they might fall through for a variety of reasons. Don’t give up. Keep trying. You might have to tweak some of your expectations, parameters, and asks, but at the end of the day, you will find something that will be the right spot that is good for your business and make you the most successful business. A landlord wants a tenant to be successful. Obviously, the tenant wants to be successful on their end. They want you to stay there as long as possible and drive as much real traffic to the center.Don't give up. Keep trying. You might have to tweak some of your expectations or parameters, but at the end of the day, you will find something that will be the right spot that is good for your business to make you most successful. Click To Tweet
Joe, you’ve come a long way.
I remember when your dad bought that Nissan Altima with the backseat that had the fancy console.
Are you thinking the Volvo?
No, not the Volvo. It was the Nissan Altima. Joe used to drive this old Volvo. We would go around. We’re not going to talk about what we used to do in that Volvo when we were in high school. When you graduated college, your dad knew that you were on this track and that you were getting into the real estate world. They got you that Nissan Altima. That was a big step up from the Volvo.
The Volvo had 240,000 miles. When the muffler fell off, it was done. Philadelphia put a big ding in that too now. I appreciate you having me. I feel honored to be with you. As you said, it’s full circle being able to hang out. I wish we were closer as it relates to distance-wise and location, but we’ll have to get everybody, the kids, and everyone together hopefully in the near future.
No doubt. Give the family my best. Thanks for coming on.