Ch.3: Retail Location and Design Studying location options and related issues Negotiating a lease agreement Understanding lease terminology Using space to maximize sales and customer contact Choosing store fixtures Working with landlords and government inspectors

Location, Location, Location! PROS CONS Main Street Good for convenience and specialty businesses Great foot traffic Good loans available in historic buildings Just off Main Street Better parking Lower rents Parking difficult, can be expensive Some signage restrictions Less visibility Less foot traffic

Location, Location, Location! PROS CONS Neighborhoods Good for convenience and specialty businesses Good parking availability Peak business at earlier hours than mall sites Roadside Freestanding site Ample parking Clientele limited to the particular area Limited hours may limit profit potential Requires aggressive ad and marketing plans “Urban sprawl” restrictions

Location, Location, Location! PROS CONS Strip Malls Good for convenience and service-type businesses Good parking availability Welcomes small and independent businesses Community Centers Large anchor stores attract foot traffic Ample parking Location may not be best for your target customers Leases, rules can be very restrictive Leases, rules also very restrictive

Location, Location, Location! PROS CONS Regional Malls Draw customers from a large geographic area Good parking availability Can start small (kiosk) Specialty Centers Success depends on how well the center draws customers Ample parking Most expensive start-up Check out reputation of mall first Restrictive rules, leases Your store concept must “fit” the specialty image of the center

Location, Location, Location! PROS CONS Neotraditional Community Centers Planned shopping areas with distinctly old- fashioned or artsy design Could live upstairs from store May have limited parking (customers encouraged to walk) Most customers from very localized area Restrictive rules, leases (especially about signage, décor)

Your Landlord Will Want… A complete business plan Space requirements & your plans for space Photos: of merchandise, similar stores or concepts, and a headshot of you Financial statements Funding commitments Information about industry trends Anything to enhance your image as a professional and a good prospective tenant

Negotiating a Retail Lease Base rent Percentage rent Is lease “triple net?” CAM charges Property taxes Security charges (part of CAM fees or not?) Insurance fees & requirements Promotional costs Merchant dues (in mall locations) Miscellaneous expenses and/or professional services (exactly what are they?)

Interior Design Considerations What will the lease allow (or not)? Location of cash wrap area Location of markdowns, sale racks Create pathways with contrasting floor colors or textures Avoid straight lines Position displays to prompt customers to “stray from the path” Visual depth of display fixtures