How to Negotiate Kiosk Business Lease Terms
So you've decided to enter the wonderful world of owning a kiosk business. At first glance, they may seem less than appealing compared to their brick and mortar counterparts. But factor in the high profit margins and packed malls surrounding them and you just may have yourself a winner. Here are some tips on how to negotiate a lease for your new kiosk business.
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Instructions
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Find a great location. Like any business, the location is absolutely integral to the success of the business. When you first buy your business, make sure that you are in a location that receives high traffic. For instance, being next to the food court is much better than being stuck in the corner of the mall next to a discount shoe shop. If the owner doesn't offer you a great location, then be willing to walk away. You can even impress on them that unless you make money, you won't be able to pay them their lease fee.
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Determine the length of your kiosk business. Some kiosk items are seasonal, such as Halloween costumes or holiday ornaments. It won't do you much good owning and operating those shops during the off-season. So be sure to mimic your lease with your product line. Some kiosks, like those who sell sunglasses are largely year-round products (especially in warmer climates.) You should then negotiate a lease that is longer term to reflect the product cycle.
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Tie the sales into the price of the lease. When you are first starting out, it is hard to tell if your kiosk will be successful at all. You don't want to be on the hook for some steep lease amount. Propose to your potential landlord that they take a piece of sales for the first few months of operation. That way, if the business fails you limit your risk. If it takes off, well then the landlord gets a bigger piece of the action than they were counting on. After a period when the business is well established and you have a track record, then you can negotiate new terms that are agreeable to both parties.
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Include advertisement features. Because kiosks often open and close quickly, it's hard to spread the word about advertisement. Ask your landlord if you can have signs, posters, or even hand-out fliers in other areas of the mall or location. It may be against policy, but if not, make sure you get it in writing. That way you can really work to grow your business.
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Add hours of operation, number of employees, location where the kiosk will be stored at night if it is mobile, and even ask about the mall insurance policy. Discover if the policy for fire, flood and earthquake covers the merchandise in the mall and hence in your kiosk. If not, then you may have to purchase it separately.
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Re-negotiate your terms after the initial business lease is up. Do not be afraid to re-negotiate; it is expected in business that terms will constantly change. It is to your advantage to push for more favorable terms as the business builds a base. The worst they can do is say no, and if they do, there are plenty of malls in plenty of towns across the rest of the country.
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Tips & Warnings
Always have a lawyer look over the final contract before you sign. This will insulate you from mistakes and hidden business clauses.
