Tama J Shor, Publisher of Directory of Major Malls (TJS): As an introduction, please fill us in a bit on your background and how you got to this point in your lengthy career in retail real estate.
Dan O’Connell, Founder of Premier Retail Support (DOC): I started my retail career in operations (with Time-Out Family Amusement Centers) and worked my way up to overseeing seven locations in four states as a Regional Manager. After Time-Out was purchased by SEGA ENTERPRISES they wanted to embark on a major expansion. They said, “We can teach an experienced real estate rep the operations or teach one of our experienced operations people real estate.” I was promoted and never looked back. That position led me to Sunglass Hut, followed by GNC corporate and franchising, Family Dollar / Dollar Tree, and finally, United Franchise Group with 1,600 franchisees in 80 countries with 10 franchise brands. I have personally leased over two million square feet. Throughout my 30-year career I have always loved supporting franchisees. It has been the most rewarding part of my real estate journey.
(TJS): What do you think are key concerns retailers need to consider with the changing retail landscape?
(DOC): Preparing for the unexpected is at the top of my list. What if your anchor didn’t open? What if your tenant loan was not approved? What if your architect’s plans were rejected by the city and you don’t get your building permit? What if cities stop permitting inside dining again? The list could go on and on. These are some of the concerns that can be addressed in a tenant’s LOI and lease.
(TJS): More recently, you’ve been very focused on supporting franchisees in their efforts to lease the best locations for their new locations. Are there specific factors which you feel are often missed in this process?
(DOC): Yes Tama. Let’s start with your last word, ‘process’. Leasing reps, brokers, landlords, and developers all know the process. New franchisees do not. Factors often missed start with analyzing demographics, choosing the right trade area, selecting the right location, agreeing to economics they can afford, understanding provisions they should have, addressing all the construction variables, plus hiring and training followed by a grand opening.
With my franchisees in the past, I’ve used the analogy, opening your first location is like riding a roller coaster blindfolded. You have no idea where the twists and turns are so it’s tough to prepare for them.
(TJS): Are there areas which you believe Franchisors are not properly supporting their franchisees in this process? Why do you think this occurs?
(DOC): Having been supporting franchisees for decades, I believe in my heart franchisors always try and do their best. They have a vested interest in the franchisee’s success. They want the franchisees to be multi-unit operators. The franchisees want to open multiple locations. The problem is each franchise prospect comes in with an entirely different skill set than the last franchisee. So, the challenge is bringing each new franchisee up to speed and providing them with the information they will need to make the right decisions.
(TJS): After so many years involved in retail real estate, what prompted you to embark on creating a knowledge base and learning system for educating people about retail leasing?
(DOC): Every experienced leasing rep has probably had the same experience but to me it was my epiphany. I was driving with my daughter and saw a new coffee shop opening on the PM side of the highway in Pittsburgh, PA. I said to Rachelle, “See that coffee shop? It will be out of business in 3-6 months.” Her reply was, “No dad. It’s having their grand opening.” I replied, “Rachelle, it’s on the PM side of the highway. No one is going to take a left, do a U-turn, and get back in this lane and sit through 3 more lights for a coffee.” It closed a few months later. I thought, with all these examples, what if the entire “process” was memorialized in a website, in a self-help sequential overview for franchisees, mom and pops, and new entrepreneurs to read and understand the “process” before they invested tens, if not hundreds of thousands of dollars?
(TJS): Is there a particular anecdote which illustrates an experience with a franchisee where your input shifted them away from a bad real estate decision to one in which they found greater success than anticipated?
(DOC): Yes, I had a franchisee that was focused on a former post office location. It was the right size, right price, and plenty of parking. But you couldn’t see it. It was behind a 7-11. Completely hidden from view. I shared with my franchisee that each business is a destination or impulse “use” and the location they select has to mirror where they are on that destination / impulse scale. For example, a tuxedo rental shop can go almost anywhere because it is a 100% destination “use.” If someone wants a tuxedo for a prom or wedding, they will find the shop wherever it is. But an impulse use like Mrs. Fields Cookies must be highly visible, with lots of foot traffic, which is why you’ll see them on the premier corner in the food court.
(TJS): What do you think is the best way for someone without any prior real estate experience to succeed in finding and negotiating the best location for their business?
(DOC): That’s the easiest question you’ve asked Tama.
If someone is going to go through the time and effort to start a business, they need to build a solid foundation based on a sound education of every facet of the business before signing on the dotted line. It is such a long-term commitment with a high-stake money obligation, if you don’t do the homework, you’re going to lose a lot of money. Oftentimes, Entrepreneurs need help to make wise decisions by providing them with information about the multitude of decisions they must make before they launch their business. Facets like site selection and negotiating a lease are huge investments. Making ill-advised decisions with construction at your site can set your grand opening back months. Entrepreneurs may be provided with very optimistic timelines because the advisor doesn’t know the possibilities of pitfalls along the way. The more you know, the more you will be able to navigate a complex industry with confidence. Knowledge really is power.
This is one of the primary reasons we launched the Premier Retail Support website. To provide a high level of education to the entrepreneur and the franchise community as a whole. Where else can you reach out and get advised in this business with the click of a button?
As our subscribers have repeatedly told us, they found themselves saying, “I didn’t know that.”
Visit www.premierretailsupport.com today.
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About Dan O’Connell
Founder of Premier Retail Support
Dan’s background includes over 30 years of leasing commercial retail real estate for numerous companies. He has personally leasing over two million square feet and has learned lessons that saved his employers hundreds of thousands of dollars, avoiding dead rent” while taking into consideration all the variables to be considered while leasing commercial space.
Finding the appropriate location for an expanding retailer is always a challenge. When factoring in competition, demographics, visibility, accessibility and the proposed occupancy structure, it can be overwhelming!
Following Dan’s passion to help future business owners, he founded Premier Retail Support, an online Retail Real Estate leasing information source. The website is built as a reference took in a self-help format so future business owners will find themselves saying, “I didn’t know that”!” and have the knowledge to succeed. After all, That’s the PRS goal.
Contact Dan via the Premier Retail Support site at www.premierretailsupport.com or email email@example.com