15 August 2021

Why Does My Franchise Need A Commercial Lease?

Commercial Lease

Why does my franchise need a commercial lease?

You’re scared of the risk? Committing to a commercial lease agreement for your franchise can be daunting. Let me try and help you understand why this is the key to your success.

Why is a physical address so critical to my business?

Google has changed to be even more selective than before. The SP Screens website performs well and can generate leads. It’s a high traffic site because of the number of franchise sites we have, and it’s fresh which Google likes. We have the landing pages on the website for each local franchise. Mentioning your local franchise location on our website help to start generating leads.

Google AdWords’ works and is expensive. The best leads are the organic ones (free).

There is a real trend now for consumers to search ‘Security Doors’ & ‘the location they live’ (this is not new). Customers then call or message, and never go to the actual website.

Consumers want you to be close to them.

People have short attention spans and want instant results. They click and/or they call. They are also visual. They see a map and think “that’s the one”. They want a good brand, good product and for it to be in their face so it’s easy. If you’re not listed on the first page or the business listing, you’re nowhere.

A mobile businesses that covers suburb after suburb on their website, will not perform as well. A business with a physical and local address will perform better.

In additional to this, you need to be able to receive your custom made screens and store them ready for installation.

What are the marketing advantages of having a factory / showroom?

A showroom that has a physical address is far better value for money than throwing money at Google AdWords. People go to Google after hearing a radio ad. Your radio ad could very well drive consumers to Google and Google sends them somewhere else. No showroom = don’t throw any money at expecting leads from that area. No matter how clever we are with our digital marketing, Google says “no you’re not, and I am not going to display you in the maps section”.

See the below Google result when I searched ‘Security Doors Central Coast’. Because we have a physical location (and some great Google Reviews) we have ranked #1 in the business listing / maps. People who run mobile businesses and say they cover suburb after suburb on their websites, will not perform as well.

How much should I budget for my commercial lease?

Your lease amount would vary pending location. I would estimate from $25,000 for a regional area to $35,000 to $48,000 for a metropolitan area. Keep in mind our existing franchises account for this expense as part of running their business. It’s a fixed cost that is scalable as your business grows with head count.

What specifications should my factory / showroom have?

Showrooms are an expense, if you can save $15k a year by renting the right size do that. Showrooms used to be about high profile, main street, lots of passing traffic. Lots of passing traffic is nice, but not worth it if it costs $10k more. Cheap / right size / ability to access.


Factory / Showroom Specs

  • Approx. 130 square meters
  • With a showroom (if not, you can create one)
  • Road Access for deliveries for trucks to drive in, park and drive out forward
  • No steep driveways
  • No gated complex that gets locked up (we both need access anytime)
  • A forklift must be able to get from the truck to the factory and back again

What if I need to get out of my lease?

Even though leases are typically 3 years, if it doesn’t work you can always get out of it. Ultimately you will need a mutual agreement between the landlord and yourself (the tenant).

There are two ways a tenant can get out of a commercial lease:

1. Negotiate with the landlord

Once negotiated with the landlord (Real Estate Agent), it’s possibly to exit the commercial lease in exchange for a financial settlement or ‘break lease fee’. 

2. Try and find another tenant to take over your lease

You will need to look for a tenant yourself and also potentially cover the costs of the Real Estate finding a new tenant. The landlord then also has the opportunity to re assess the least amount.

I’d also encourage you to do your own research on this just for your own peace of mind. I found some information on the NSW Government Small Business Commissioner site.

Contact Us

Contact us by calling 1300 939 700 or by using the simple form below, and one of our friendly consultants will get in touch.

Thank you for your enquiry, a member of our team will contact you soon.
If your enquiry relates to fly screens please note that minimum order quantities apply. These minimum order quantities do not apply if you are also ordering other SP Screens products. Minimum order quantity of 10 for Fly Screen Windows; Minimum order quantity of 2 for Fly Screen Doors. Also, minimum order quantity of 4 for Diamond Grille windows.