The construction process is often the most challenging part of any franchise startup. Incorporating design decisions, city commentary, landlord issues and financial issues, the project ultimately puts pressure on the final details before the franchise door opens. Usually, if the business owner has a rescheduling, they will go back and reconsider the actual cost of building the demolition space. Hidden franchise construction costs are lurking after each expansion and become the inevitable tenant's responsibility after leasing.
One of the most important aspects of site assessment is understanding the physical condition of the tenant space and its relationship to the franchisee. The "standard" vanilla condition negotiated in most leases may cause the entering tenant to be unaware of many of the required upgrades when signing the lease. These are usually facilitated by code requirements, poor conditions of existing structures, or design requirements brought to the project by the franchisee.
Consider the following brief list of common hidden costs:
A. New or redesigned fire suppression system.
B. Additional export requirements.
C. HVAC system configuration.
D. Reduce the fire rating of the wall.
E. Electrical service entrance sufficiency.
F. ADA configuration.
G. Asbestos or harmful substances are reduced.
H. Water or gas services are insufficient in scale.
I. Need an extra bathroom.
J. Fresh air requirements or exhaust system.
K. In-wall sound insulation, sound attenuation insulation requirements.
L. Underground pipelines, fixture requirements, water dispensers, mop sinks, floor drains, etc.
M. Floor preparation, waterproof membrane requirements.
N. The health department has completed the requirements beyond the Vanilla Box specification.
O. Fire alarm system.
P. The landlord's roof contractor is required to provide warranty.
Q. Adequacy of storefront construction, door location, glass area, energy efficiency, etc.
R. The location provided by the landlord does not match the plan.
S. Adequate site construction, parking, garbage bins, delivery, etc.
T. Construction license fees are too high, and bonds and insurance fees are too high.
U. Strict landlords need policies and procedures at the construction site.
Fifth, the labor requirements of the union or the requirements of the landlord contractor.
W. Click on the cost of the utility connection.
X. Hidden or unforeseen circumstances under walls or floors.
Y. Complexity of demolition activities - removal of debris from the construction site.
Z. Other emergency/export lights required by the construction department.
The list extends from A to Z. The best advice is to understand the physical properties of the space you are renting. When you consider a different location, it can have a major impact on your decision. It may be useful to combine a variety of expertise from the outset: a general contractor for dismantling space reviews, a financial planner for business plan review, a real estate agent for on-site review, and one for Lease review of real estate lawyers. Instructing these hidden issues before committing can play an important role.
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