FRANCHISE ADVICE
Keeping the doors open
From his viewpoint within the propert y consultancy sector, David Brooks considers how premises-based fra nchisees and landlords can work together in the current challenging environment
T
he term ‘unprecedented times’ is a well-worn expression but really does best describe the turmoil of the
last few months in both our personal lives and businesses. As a property consultancy, we have
worked extensively with national franchisees in retail, food and drink and leisure, yet nothing could prepare us for the upheaval we are witnessing in the commercial property market. Having worked in the UK and the US, I thought
I'd seen it all – from fi nancial crashes, including the global meltdown of 2008, to the trauma of 9/11 and its effect on New York and world economy thereafter – but this is something quite different... We are witnessing a huge and
signifi cant structural shift in the way we live, work and shop and the changing relationship between commercial landlords and tenants. Though the transaction market is starting to slowly re-emerge from our enforced hibernation, as a practice we have been busy renegotiating rent abatements for some of our tenant clients. Rent
collections across UK retail have been as little as 14 per cent for the June quarter. However, this does not mean that the tenant’s rent and lease obligations have gone away. There are some better capitalised businesses who have just decided not to pay rent, even if they have the capacity to do so. The Cornovirus Act 2020 has offered relief from rent collection enforcement actions and lease forfeiture to 30 September of this year, but we strongly advise any tenant in rent arrears to engage with their landlords at the earliest opportunity. So, how, as a potential franchisee
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