Author: mark

Negotiating with your landlord can be stressful and challenging. Some landlords make it particularly difficult. Lawyers representing landlords can be argumentative, they can block even reasonable requests.

Then, there are landlords who are a dream to deal with and who support your business. If this is your situation, love it for what it is, appreciate it.

The most common situation for a small business retailer in dealing with a landlord is when it is time to negotiate the rent.

If you want to reduce the rent you pay for your shop, you need to make a compelling business case to the landlord.

Wanting a reduction is not enough. You need to make a fact-based case.

We have negotiated for our shops many times and have used a professional lease negotiator on three occasions. We found we were more satisfied when we did it ourselves. While the negotiators were nice enough, we were never  certain that they put our needs ahead of their relationship with the landlord. In one instance, we felt like we paid them to soften me to agree to terms I’d later be unhappy with.

Here is our advice for small business retailers for negotiating with their landlords for themselves. Gather what you need:

1. Current profit and loss (most recent year or to the end of the most recent quarter) compared to the same period a year earlier.
2. Sales comparison for a recent period (more than three months) to the same period a year ago. This will ideally include a transaction count comparison.
3. Details of every step you have taken to improve traffic and sales, including external marketing and costs associated with each activity. Assemble this in a spreadsheet. This is important, as it shows you’re doing all you can to attract shoppers and maximise opportunities. This makes your case
4. Itemised
5. Numbered
6. Provable.
7. Details of steps you have taken to manage costs. Again, show that you’re professional and thorough in your approach to your business.
8. Changes made to the business over the last year. Assume your landlord has not been to the shop and seen the work you have undertaken.
9. If possible, comparisons with other retail businesses—this demonstrates an understanding of how you compare, especially if it shows you as doing better than most in key parts of the business.

Take your time. Be thorough. The more complete and more professional your documents are, the more notice will be given to your request for assistance.

Once you have this information together, look for a narrative, a story, which supports the proposal you make to the landlord.

By narrative, we mean a case, a story, the reason, to justify your request. The data you have gathered will/should support this.

The clearer a narrative is supported by the data, the better the chance of a positive hearing.

It’s not enough to say you want a better deal, a discount on rent or some other relief. Landlords get that all the time. Your request needs to come with something for them. Be specific and ensure you have the data necessary to justify your claim.

If your financials show your profit’s stable or improving, your case will be hard to make.

If profit’s falling, your case is easier. Don’t manufacture figures to suit your case, though. Look at the accurate data and listen to what it tells you.

If your financials show profit declining or you making a loss, consider what you actually want as a result of this.

Too often, retailers go to a landlord with a problem and not a solution. Work on your solution and use the information you have gathered to justify the solution to your landlord.

The best person to pitch a landlord for assistance is the business owner. While we understand the appeal of hiring someone to do this for you, our recommendation is that you do it yourself.

Put your proposal in writing. Keep it brief and to the point. Focus on facts. Attach the evidence to which you refer. Outline what you want and why, without emotion or accusation. Consider explaining what it would mean if you did not achieve what you wanted. Keep emotions out of this.

Usually, a landlord will want a meeting. Ensure there is an agenda. Go with prepared notes and your evidence. Don’t get side-tracked. Don’t engage in emotive arguments.

Your sole focus ought to be on the outcome you want and the evidence you have that supports this outcome.

Keep your emotions to yourself through the whole process of seeing a better rental outcome. While the situation may feel stressful, exposing your emotions to the landlord is unlikely to help advance your case.

The best position to be in when negotiating with your landlord is to be running a shop they like, a shop they want to keep in the tenancy.

A recurring and distressing issue within the newsagency channel involves legally binding agreements with marketing groups. It is not uncommon for a newsagent to feel trapped in a multi-year contract that is not delivering the promised benefits, after being persuaded by verbal assurances that are not reflected in the written terms. This situation can cause significant financial and emotional hardship.

To avoid such predicaments, we urge newsagents to exercise extreme caution and diligence before entering into any partnership with a marketing group.

The Primacy of the Written Contract

The single most critical step is a thorough review of the contract. Make sure you understand it. Take your time. Push back on pressure.

• Read the entire document: Every clause, including the fine print, must be read and understood. The terms outlined in the document are what is legally enforceable, not what is said in a meeting or on a phone call.
• Disregard verbal promises: A salesperson may suggest that terms are flexible or that an exit is possible if the partnership is not working. Unless this is explicitly written into the agreement, such statements should be considered non-binding. The decision to sign must be based solely on the text within the contract.
• Identify the minimum commitment: Locate the clause specifying the minimum term of the agreement. This is the locked-in period. Newsagents must be certain they are willing to commit to the group for that entire duration, regardless of performance.
• Do not sign under duress or uncertainty: If any part of the agreement is unclear or causes discomfort, do not sign it. The period before signing is the point of maximum leverage. It is better to walk away from a potential agreement than to be locked into an unfavourable one.

Navigating Common Scenarios

The persuasive sales pitch: New business owners are often a target for charismatic sales representatives. It is important to remember that this is a business transaction. The goal is not to form a friendship but to secure a service that will demonstrably help the business thrive. Scrutinise the business value proposition, not the personality of the salesperson.

Buying a pre-branded business: When purchasing a newsagency that is already affiliated with a marketing group, buyers may be pressured to sign with that group to retain the existing branding. A common tactic is to suggest the buyer will be liable for de-branding costs if they refuse. This is often incorrect. The responsibility for fulfilling or terminating existing contractual and branding obligations should rest with the seller prior to the completion of the sale. A buyer should not be misled into believing they must continue with an incumbent brand if it is not the right choice for their business.

Evaluating the True Value of a Brand

Before committing, newsagents should conduct their own independent assessment of the marketing group’s brand.

• Public perception: What does the brand stand for in the eyes of consumers? How is it recognised in the market? Seek answers from shoppers and the local community, not just the group’s marketing materials.
• Brand consistency: It is a known issue in the channel that brand consistency can be low. Visiting ten different stores within the same group may yield ten very different customer experiences.
• Your local brand: Ultimately, the most powerful brand is the name of the newsagency itself and its reputation within its community. The success of the business will primarily be driven by local efforts, service, and engagement.

Signing an agreement with a marketing group is a major business decision. It requires careful, dispassionate consideration. An unfavourable contract can lead to years of difficulty. By reading the contract thoroughly, understanding every term, and being confident in the decision, newsagents can protect their business and their wellbeing.

It’s a story that’s all too common: a newsagent, just a couple of months into an agreement with a marketing group, finds themselves unhappy and wanting to leave. They recall being told they could exit the arrangement if it wasn’t a good fit. However, the document they signed tells a different story: they are locked in for several years. When they raised their concerns, the friendly promises were replaced with threats of legal action.

This situation is a harsh lesson in the importance of due diligence. For many in our channel, especially new newsagents buying their first business, the allure of a compelling sales pitch can be blinding. But a friendly chat is not a contract.

Before you sign any agreement with a marketing group, here are the essential points to consider.

Read the Contract. Then Read It Again.

This cannot be overstated. The single most important document in your business relationship is the written agreement. What a salesperson says, promises, or implies holds no weight once your signature is on a piece of paper that says otherwise.

• Verbal Promises vs. Written Terms: Sign an agreement based only on what is written within its pages. If a salesperson tells you, “Don’t worry, you can leave anytime,” ask them to show you exactly where that clause is in the contract. If it’s not there, it’s not real.
• Understand Every Clause: Be sure you understand what you are agreeing to. If there is any jargon or language you find confusing, seek clarification or independent advice before proceeding. You must be prepared to stand by every term in the agreement.

Beware the Friendly Sales Pitch

They are there to sell you something. Sometimes, faux friendship can be a perfect way to get your signature. A good salesperson is personable and builds rapport. But you are not signing a contract to be their friend; you are entering a legally binding business partnership. The hope is that their group will help your business thrive, but hope is not a strategy. Scrutinise the offer, not the person offering it. If you feel uncomfortable or pressured at any point, do not sign. At this stage, you are in complete control.

Know Your “Locked-In” Period

Every agreement will have a minimum commitment period. Find this section and read it carefully. Are you comfortable committing your business to this group for that length of time? Two, three, or five years (with an auto-rollover) is a long time to be tied to a strategy that may not be working for you. If you are not sure you can make that commitment, don’t sign.

The Pressure of a Pre-Branded Business

A common pressure tactic arises when purchasing a business that is already part of a marketing group. You might be told that you must sign on to keep the branding and that de-branding will incur a significant cost for you.

This is often misleading. The responsibility and cost of de-branding a business should lie with the current owner as a condition of the sale. Do not be duped into joining a group you’re unsure about simply to avoid a problem that isn’t yours to solve. Do what is right for your future business, not what is convenient for the seller.

What Does the Brand Truly Stand For?

Take a moment to step back and assess the marketing groups themselves. What is their value proposition, not from their slick brochures, but from the perspective of the average shopper?

The reality in the newsagency channel is that brand consistency is a major issue. You can often visit ten different shops under the same marketing banner and have ten vastly different customer experiences.

Ultimately, the brand that matters most is your own. Your business name, your reputation in the local community, and the service you provide are what will truly define your success.

Your Signature is Your Bond

An ethical organisation, upon realising a client is deeply unhappy, would work to find an amicable solution. A contract should be a framework for a mutually beneficial partnership, not a cage.

Before you sign any agreement, pause and reflect. Read the document from start to finish. Understand your obligations and the minimum commitment. Only when you are completely satisfied with every term should you consider signing. Your signature is your bond—make sure you’re giving it to a partner you can trust.