1851

Location, location, location. Real estate has always played a massively important — and sometimes difficult — role in the franchising process. Now, as interest in franchising&nbsp;<a href="https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2021/06/04/tracking-the-growth-of-franchising/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-master-lease-negotiations-in-the-franchising-industry-2718812" target="_blank" rel="nofollow">skyrockets</a> following the uncertainty of the COVID-19 pandemic and competition within the commercial real estate market&nbsp;<a href="https://www.wsj.com/articles/commercial-real-estate-sales-and-values-surge-to-records-11635249600?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-master-lease-negotiations-in-the-franchising-industry-2718812" target="_blank" rel="nofollow">booms</a> due to pent-up demand and a lack of inventory, it has never been more essential for franchisors to master the complex real estate process and ensure franchisees can secure attractive lease terms.&nbsp;That is why connecting with a trusted real estate partner like Franchise Realty Partners can be essential in helping franchisors avoid any unnecessary mistakes along the way.&nbsp;To start, the two biggest factors to consider in a lease negotiation are the rent requirements and the tenant improvement allowance (the amount of money the landlord will contribute to turn their building into the designated concept). These two items can have a “see-saw effect” — as one goes down, the other is bound to come up. Make sure the broker you work with asks about about which is most important to you, the client, and pushes that agenda the most with landlord. Saving cash upfront for the building improvements, as well as a lower rent, will set the tenant up for long-term success!Another important factor is properly negotiating the “free rent period.” Franchisors, and franchisees, need to ensure they are giving themselves enough time between the lease signing and rent payments commencing. All of the due diligence — getting inspections, zoning confirmation, architect drawing, building permit and civil engineer — can take several months depending on the scope of the project, so franchisors need to ensure they aren’t paying rent before they start collecting revenue.During negotiations, franchisors and franchisees also commonly overlook their ability to add additional lease renewal terms to the contract. This doesn’t cost the tenant anything but gives them the peace of mind knowing that after they spend the time and energy creating a successful business, they won’t be kicked out of the space at the end of the original term. It also means the landlord can’t raise the lease rate without safety renewal parameters in place.There are also several potential red flags that may come up during lease negotiations. For example, maintenance responsibilities, specifically that of the structural integrity of the building, should always fall on the landlord. A franchisor of a brand once told me a story about how their leased space was flooded due to a plumbing issue under the building’s slab. Not only did the business lose income while being forced to close for repairs, but the lease dictated that the tenant would be responsible for the cost even though the plumbing was installed prior to the tenant taking over this space. These are the kind of nightmare scenarios that can easily be avoided with the right lease terms.Remember that negotiating a lease is like playing a professional hand of poker — the faster a potential tenant tries to rush through it, the more the landlord is going to feel that desperation and hold firm to their terms. The best deals usually take three rounds of negotiations, which typically includes 30 days of negotiations between brokers and agents and then an additional 30 days finalizing the lease contract language between attorneys.For both franchisors and franchisees, the entire real estate process can be overwhelming, especially the lease negotiations. With over two decades of collective experience in both franchising and commercial real estate, Franchise Realty Partners offers a turn-key real estate solution to help franchisors with the important aspect of site selection for their franchisees, handle all the communication with brokers, and, last but not least, negotiate leases. This allows franchisors and franchisees to focus on their most important task of day-to-day operations and growth, while feeling confident they are well-equipped to secure the type of attractive lease terms that will position their brand for greater success in the future.<a href="https://www.linkedin.com/in/drew-mcwilliams-3b041a5?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-master-lease-negotiations-in-the-franchising-industry-2718812" target="_blank" rel="nofollow">Drew McWilliams</a> is the founder of <a href="https://franchiserealtypartners.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-master-lease-negotiations-in-the-franchising-industry-2718812" target="_blank" rel="nofollow">Franchise Realty Partners</a> and a commercial real estate broker in the Carolinas with over 20 years of real estate experience. Drew and his wife also own a children’s preschool franchise, Ivybrook Academy, which currently has 52 locations open or under development. After years of operating in both the franchise and real estate space, Drew knows there is a disconnect between what third-party real estate companies offer and what franchisors need. Now, he is passionate about solving companies’ real estate pain points and helping them scale and grow.

How to Master Lease Negotiations in the Franchising Industry

1851 Franchise

Real estate is often an unnecessary pain point for both franchisors and franchisees, which is why leveraging the knowledge and support of trusted experts in the field can be essential to achieving the most attractive lease terms.

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

how-to-master-lease-negotiations-in-the-franchising-industry

TruBlue Home Service Ally

How Sean Fitzgerald Is Turning Personal Experience Into a National Mission Around Aging in Place

how-sean-fitzgerald-is-turning-personal-experience-into-a-national-mission-around-aging-in-place

Wild Bill's Craft Beverage Company

Wild Bill's Craft Beverage Co. Franchise - Opportunity for Veterans - 1851 Franchise

U.S. Veterans Magazine: Mike Quilty Is Turning Military Leadership Into Opportunity for Veterans

veteran-franchise-opportunities-craft-soda

Sport Clips

image of a sport clips franchise being successful and a sport clips hairstylist being friendly  

How Sport Clips Haircuts Keeps Men Coming Back and Why That Loyalty Is Fueling the Brand’s Next Phase of Growth

sport-clips-customer-experience-growth

image of sport clips franchise operating successfully 

How Sport Clips Haircuts Became the Leading Franchise in the $100 Billion Mens Haircare Segment and Why the Time Has Never Been Better to Join

franchise-opportunity

Jollibee

Photo of new Jollibee restaurant location

New York Business Journal: Jollibee Opens Midtown Restaurant, Eyes NYC Growth for Filipino Chicken Chain

midtown-nyc-restaurant

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

The Top 10 Low-Cost Franchises With High ROI 

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Jersey Mike's Takes First Steps Towards Initial Public Offering

jersey-mikes-makes-first-steps-towards-ipo

Prince St. Pizza Partners With Dave’s Hot Chicken Franchisee for National Growth

prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-growth

FTC Settlement Puts New Focus on Franchise Disclosure Standards - 1851 Franchise

FTC Settlement Puts New Focus on Franchise Disclosure Standards

franchise-disclosure-violations-xponential-fitness-lawsuit-ftc

Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units - 1851 Franchise

Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units

applebees-franchisee-bankruptcy-neighborhood-restaurant-partners

Why Skilled Trades Are Emerging as the Economy’s Most AI-Resilient Careers

ai-skilled-trades-authority-brands

Private equity firm&nbsp;<a href="https://skylineinv.com/">Skyline Investors</a> has acquired rent-to-own franchisor&nbsp;<a href="https://buddysfranchising.com/">Buddy’s Home Furnishings</a> in a deal that signals continued investor confidence in franchise-based retail models, according to a&nbsp;<a href="https://www.retailtouchpoints.com/features/mergers-and-acquisitions/rent-to-own-franchisor-buddys-home-furnishings-purchased-by-private-equity-firm">report from Retail TouchPoints</a>. The transaction, announced Feb. 4, brings new ownership to a system of more than 220 locations across 18 states and Guam, positioning Buddy’s for its next phase of growth within the franchising sector.Financial terms of the deal were not disclosed, but the acquisition reflects a broader trend of private equity firms targeting established franchise brands with recurring revenue and strong unit-level performance. For Buddy’s, which specializes in furniture, electronics and appliances, the partnership is intended to strengthen its operational platform and expand long-term opportunities for franchisees.“This is an exciting new chapter for Buddy’s,” CEO&nbsp;<a href="https://www.linkedin.com/in/michael-bennett-cfe-a9309538/">Michael Bennett</a> said in a statement. “Skyline brings a collaborative mindset that our franchisees and customers will feel immediately. We’re not just changing ownership; we’re gaining committed partners who understand our business, value our franchise network and are ready to invest in our collective success.”Skyline structured the investment alongside&nbsp;<a href="https://www.linkedin.com/in/jeffrey-jaeger-bb48b43/">Jeffrey Jaeger</a> and&nbsp;<a href="https://www.linkedin.com/in/scott-alter-7aa99311/">Scott Alter</a>, co-founders and principals of affordable housing developer&nbsp;<a href="https://standard-communities.com/">Standard Communities</a>. Their involvement adds financial and strategic expertise aimed at supporting capital formation, balance sheet management and disciplined expansion.For franchise operators, the deal offers potential benefits in the form of increased corporate resources, enhanced systems and renewed investment in technology and infrastructure. Private equity-backed franchisors often prioritize scalability, data-driven decision-making and operational consistency, all of which can influence franchisee performance and long-term brand stability.Skyline brings prior experience in the rent-to-own space, including investments in&nbsp;<a href="https://www.gomajik.com/">Majik Rent-to-Own</a>, which may help accelerate Buddy’s development efforts and refine its franchise support model. Company leaders say the firm’s approach is centered on partnership rather than short-term returns.“Buddy’s represents exactly the type of platform opportunity we’re built to support,”&nbsp;<a href="https://www.linkedin.com/in/kevintom/">Kevin Tom</a>, founder and managing partner at Skyline Investors, said in a statement. “With Buddy’s proven brand and strong franchise network, there’s a clear runway for growth.”As private equity continues to expand its footprint in franchising, deals like this highlight the sector’s appeal to institutional investors. For Buddy’s franchisees, the acquisition marks a transition that could shape everything from marketing strategies to multi-unit development in the years ahead, reinforcing the brand’s position in the competitive rent-to-own marketplace.Read the original article&nbsp;<a href="https://www.retailtouchpoints.com/features/mergers-and-acquisitions/rent-to-own-franchisor-buddys-home-furnishings-purchased-by-private-equity-firm">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Buddy's Home Furnishings Acquisition - Skyline Investors - 1851 Franchise

Skyline Investors’ acquisition highlights how rent-to-own operators with dense unit networks and steady demand are drawing long-term capital and operational playbooks.

Buddy’s Home Furnishings Deal Signals More Private Equity Interest in Franchise Retail

buddys-home-furnishings-acquisition-skyline-investors-private-equity

<a href="https://princestreetpizza.com/">Prince St. Pizza</a> has partnered with a&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-daves-hot-chicken-franchise-costs-fees-profit-and-data-2723529">Dave’s Hot Chicken</a> franchisee to support its national expansion,&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">Pizza Marketplace recently reported</a>. The New York-based brand has joined forces with&nbsp;<a href="https://www.linkedin.com/in/lawrencekourie/">Lawrence Kourie</a>, founder and largest franchisee of Dave’s Hot Chicken, to grow its footprint across the country. Kourie’s experience opening and operating locations in multiple markets will help the brand as it enters new territories."Lawrence has built and operated one of the fastest-expanding restaurant concepts in the country, but what stands out is his disciplined approach to growth and brand integrity," said&nbsp;<a href="https://www.linkedin.com/in/lawrence-longo-342856/?skipRedirect=true">Lawrence Longo</a>, CEO of Prince St. Pizza. "He understands how to develop a concept without losing what made it special in the first place, which is critical as we enter this next phase."The expansion will use Kourie’s existing infrastructure and operations to introduce Prince St. Pizza into new markets. Each location will aim to reflect the same experience as the brand’s original Nolita shop."I have spent years evaluating restaurant concepts, and it is rare to find one that delivers both a strong product and a clear identity," Kourie said. "What Prince St. has built is difficult to truly replicate. The focus now is on growing the brand in a way that preserves that foundation while introducing it to new communities."Kourie is a key operator within the Dave’s Hot Chicken system,&nbsp;<a href="https://1851franchise.com/daves-hot-chicken-sold-to-roark-capital-in-1-billion-deal-to-fuel-global-expansion-2729557#stories">which Roark Capital acquired in a $1 billion deal in 2025</a>. The partnership connects Prince St. Pizza to an operator with experience scaling a brand that has attracted major private equity investment.Read the full article&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Prince St. Pizza is teaming up with a leading Dave’s Hot Chicken franchisee to expand nationwide, tapping proven operator experience to drive growth.

North County Pizza Inc., a major&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-dominos-pizza-franchise-costs-fees-profit-and-data-2725506">Domino’s</a> franchisee, has filed for Chapter 11 bankruptcy protection,&nbsp;<a href="https://finance.yahoo.com/news/major-pizza-chain-franchisee-files-173300667.html">Yahoo! Finance recently reported</a>. The bankruptcy filing gives North County Pizza time to restructure its debt and reorganize its business, while pausing any legal actions against the company during the process.The Oceanside, California-based franchisee did not explain why it filed for bankruptcy or whether it plans to close locations or lay off employees. Franchisees across the restaurant industry have pointed to tough competition, higher labor and food costs, and expensive leases as reasons for restructuring or filing for bankruptcy.The franchisee filed for bankruptcy on March 11 in the U.S. Bankruptcy Court for the Southern District of California, reporting $100,000 to $1 million in assets and $1 million to $10 million in liabilities.The announcement follows recent news that&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-papa-johns-franchise-costs-fees-profit-and-data-2724607">Papa Johns</a> plans to close 300 underperforming restaurants, including 200 by the end of 2026, and cut 7% of its workforce. It also comes just weeks after&nbsp;<a href="https://www.yum.com/wps/portal/yumbrands/Yumbrands/">Yum! Brands</a> announced it was&nbsp;<a href="https://1851franchise.com/yum-brands-pizza-hut-sale-2731599#franchise-news">considering a sale of Pizza Hut</a> and plans to close 250 underperforming U.S. locations.Together, these moves could point to a broader reset across the pizza franchise sector. For franchisees, this environment raises the stakes around site selection, cost control and operational efficiency, while also creating potential opportunities to capture market share as weaker locations exit the market.Read the original article <a href="https://finance.yahoo.com/news/major-pizza-chain-franchisee-files-173300667.html">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit<a href="http://www.1851growthclub.com">&nbsp;www.1851growthclub.com</a> and start your journey.

Large Domino’s Franchisee Files for Chapter 11 Bankruptcy

The California-based franchisee seeks to restructure debt as closures and strategic shifts continue across major pizza brands like Pizza Hut and Papa Johns.

large-dominos-franchisee-files-for-chapter-11-bankruptcy

The&nbsp;<a href="https://www.franchise.org/">International Franchise Association</a> has released its annual&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">Franchising Economic Outlook</a> report for 2026, painting the picture for a positive year of growth after notable economic turbulence in 2025.“The resilience of franchising has enabled our model to adapt, endure and thrive in the face of challenging macroeconomic headwinds,”&nbsp;<a href="https://www.linkedin.com/in/matthewhaller">Matt Haller</a>, IFA president and CEO, said in a release. "After a year of recalibration, franchising is better positioned to navigate an improving economic environment than independent businesses due to tax certainty, lower interest rates and investments in AI that will propel brand growth, franchisee unit-level economics and wage growth for the franchise workforce."The report features key industry projections for the year, including:<ul><li>The addition of over 12,000 new franchised businesses</li><li>The addition of over 150,000 jobs — meaning the industry will represent nearly 8.9 million jobs</li><li>An increase in total franchise GDP from $549.9 to $558.4 billion</li><li>An increase in multi-unit ownership as current single-unit franchisees pursue scale</li></ul>In addition to the strength of the industry as a whole, the organization highlighted segment-specific trends.&nbsp;<ul><li>This year, child services and commercial and residential services are recognized as top performers, expected to achieve a 3.2% year-over-year growth rate.</li><li>A focus on experiential dining, rather than value alone, may drive full-service restaurants to outpace quick-service brands in output growth.</li><li>Preventive health care has risen to be the third-largest franchised industry, and it represents strong opportunities as consumer awareness surrounding preventive health care persists.</li></ul>In terms of growth markets, Texas continues to lead the country as the fastest-growing state for franchising, followed by Florida, Georgia, Arizona and North Carolina. Michigan, Ohio and Utah have joined the top 10 this year thanks to their relative affordability and the potential they offer for market leadership and long-term growth.The outlook for 2026 is upbeat, and the drivers behind it look different than they did a few years ago. More brands are putting AI and automation to work in day-to-day operations, which helps franchisees move faster on basics like scheduling and inventory and stay tighter on margins.The growth in multi-unit ownership points to a shift in how people are approaching franchising. More operators are treating it like a scalable investment, focused on building an asset, not just buying themselves a job.As the year ramps up, IFA’s data suggests growth in 2026 will be driven by those leveraging the scale of the franchise model, embracing a tech-forward approach to business ownership, and staying agile in an evolving business landscape.Find the full 2026 Franchising Economic Outlook report&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">here</a>.

Highlighting child services and commercial and residential services as top performers, the organization predicts the industry will add over 150,000 jobs and increase its GDP by billions this year.

IFA Releases 2026 Franchising Economic Outlook Report, Predicting Over 12,000 New Franchised Businesses This Year

2026-franchising-economic-outlook-report

How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

How Much Can Franchisees Make? A Guide for Prospective Franchise Owners

how-much-can-franchisees-make-a-guide-expert-tips

Big O Tires Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Big O Tires is a full-service auto care franchise offering tires, brake repair, alignments, oil changes and preventive maintenance under a nationally recognized brand.

franchise-deep-dive-big-o-tires-franchise-costs-fees-profit-and-data

Visiting Angels Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Visiting Angels is a senior home care franchise focused on in-home support for seniors and individuals with disabilities.

visiting-angels-franchise-costs-fees-profit

Franchise Opportunity Deep Dive: A fast-casual restaurant brand serving made-from-scratch sandwiches, salads, soups and pizzas rooted in Southern hospitality.


Newk’s Eatery Franchise Costs, Fees, Profit and Data for 2026

newks-eatery-franchise-costs-fees-profit

BrightStar Care Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: BrightStar Care is a home health care franchise that provides both medical and non-medical services.

franchise-deep-dive-brightstar-cares-franchise-costs-fees-profit-and-data

JEI Learning Center Franchise Deep Dive 2025 - 1851 Franchise

Franchise Opportunity Deep Dive: The low-cost supplemental education franchise leverages diagnostic testing and a unique Self-Learning Method to support students’ growth.

How to Master Lease Negotiations in the Franchising Industry

MORE STORIES LIKE THIS