Each month we take some time out and introduce one of the team members that is important to the success of the Shuckin’ Shack seafood restaurant franchise. This month we are turning our attention to a key real estate partnership with Trademark Properties of Raleigh, NC and, more specifically, with a person who has directly helped so many Shuckin’ Shack franchisees: Vijay K. Shah, CCIM. As you’ll soon read in the interview that follows, Vijay experience with commercial real estate is a genuine advantage for our future franchise partners and existing Shuckin’ Shack franchisees looking toward expansion in 2020 and beyond!
Q1: You are currently Senior Vice President of Trademark Properties: Please tell us about your tenure with this commercial real estate firm, and your professional career prior to joining them.
I've been with Trademark Properties for six years, however, I've been in commercial real estate for over 30 years. During that time I've work for landlords, brokerage companies, and developers, so I feel I've had great training in seeing various sides of every real estate transaction. Sometimes wearing a landlord’s hat or sometimes wearing the tenant’s hat, I see each point of view has its own unique circumstances.
Q2: While Trademark Properties is based in Raleigh, what area does your firm actually cover when it comes to commercial real estate assistance?
Trademark has been based in Raleigh for over 35 years, and we cover most of the major markets in North Carolina. However, since my involvement with Retail Brokers Network, for over 10 years, we have the ability and a successful track record of networking with brokers that I have known for over 20 years in various parts of the country. So my local tenants based in North Carolina can easily expand with the confidence they have a qualified broker that can oversee their expansion plans. It's a seamless transition for them and we get the benefit of having local expert in each market that they target.
Q3: Your title includes a CCIM designation, which stands for Certified Commercial Investment Member; can you tell us how that expertise might benefit a new Shuckin' Shack franchisee?
CCIM is a designation I am proud of and held for almost 20 years. Less than 6% of all brokers for all commercial brokers have this designation. It's the hardest designation to get because it's not just taking classes and passing a test; it requires a certain volume of transactions to be achieved, as well as conducting commercial real estate business for certain number of years before you are even allowed to take the final four hour exam. To answer your question more directly, how does this designation help Shuckin’ Shack franchisees, part of our training involves understanding markets, trade areas, financing, customer demographics and psychographics, all leveraged to find the ideal restaurant location.
Q4: When it comes to restaurant franchising, location is always a primary concern for franchisees. On average, how long does it take to find, negotiate and sign a lease for a restaurant franchise?
We normally will tell a client we should allocate about six months to analyze the trade area, identify potential sites, submit letters of Intent, negotiate a lease, and then take possession of the property. Different factors can affect timing, such as a new or yet-to-be-built out space versus an existing space. Part two of my answer is once we actually secure the site, depending on what the landlord is going to do on behalf of our tenant, we normally request about six months to get the store open from the date that we get possession of the space.
Q5: The Shuckin' Shack franchising team has included Trademark in their three-step site selection process: Can you explain how those three steps help Shuckin' Shack franchisees find an ideal location in each market?
The Shuckin’ Shack site selection is so powerful because it involves the new franchisee and the advantage they have being local to the market (Step 1), it involves the Shuckin’ Shack franchising team because of their Treasure Map research and their experience with all the locations (Step 2) and involves Trademark Properties (Step 3) and our vast network to potentially raise retail space opportunities that might otherwise be missed. Once a new franchisee has been awarded, we have a phone discussion and try to meet in person if possible. As a brokerage company, we have some documents that need to completed. At the top of that is list is a letter engagement, which is required by law in most states, that basically states that the franchisee is hiring us to be their broker representative. Other necessary documents include a personal bio or resume that discusses the person's background and why they chose this concept. Remaining documents are financial. As a rule, to make certain everyone's time is used wisely, we like to get this information together before we go out and start touring sites. The main reason is we want to protect the Shuckin’ Shack brand and our reputation in the marketplace - we do not want to submit a letter of intent without complete information.
Q6: Immediately after becoming a Shuckin' Shack franchisee, our team provides a "Treasure Map" that details the population density, income demographics and restaurant competition within each new target market. How is that tool beneficial to new Shuckin' Shack franchisees?
One of the great things about working with Shuckin’ Shack is that their team is heavily involved in the decision-making process as it relates to site selection. While “location, location location” is everything, understanding the location, understanding traffic patterns and understanding customer demographics is vital, and impacts real estate decisions. For example, if you identify a location and most of the active population is “work force” and they leave work each evening, then there really isn't an active evening population in this particular area for restaurant business, as far as dinner is concerned. So we have to look beyond the numbers, and see what they actually mean. Having high population numbers, high incomes and all those things are great but, at the end of the day, we have to see where people are going after work and what are they doing for lunch.
Q7: Your company works with other franchise opportunities: What sets the Shuckin' Shack site selection support apart from other restaurant franchises?
I guess I already addressed this above, but the hands-on willingness to get their hands dirty is clearly a Shuckin’ Shack advantage. By that I mean this franchisor is very active in each component from market research, site selections, lease negotiations, construction; they are with you the entire way and will physically be there to help open the restaurant, which is very different from other franchise companies we’ve worked with.
Q8: Shuckin' Shack Oyster Bar restaurants are typically just 2,000 - 3,000 square feet in size: Does having a smaller space requirement make restaurant site selection easier or harder?
Many people not familiar with the commercial industry find out that most traditional shopping centers are built with standard decks - approximately 60 feet to 75 feet. Therefore it's much easier to find 1,800 to 2,400 sf bays. (40x60). it doesn't make it any more or less difficult, it's just that they'll be more 2,400 square foot spaces available in the 2,200 or 2,300. That being said, smaller spaces typically go faster than larger spaces, so they're usually is more demand for 2,000 - 2,400 square feet than there is for 3,000 or 3,500 square feet - which normally means we have to move a little quicker with our decision making process.
Q9: When negotiating restaurant leases with commercial property owners, are you able to secure better terms for a franchisee versus an independent restaurateur?
That's a great question, and the answer is yes, we normally get more favorable terms when we are working with a recognized franchise brand versus a mom-and-pop location. And It's more than just the lease terms! It affects tenant improvement allowance (TIA), money the landlords will give us for our build-out, it affects per square foot rental rates, it affects exclusives as to what we’re able to get. Some of the benefits are not immediate in financial gains, but representing a franchise always helps us negotiate a stronger lease and tenant protection for the franchisee.
Q10: Does a new Shuckin' Shack franchisee pay anything out-of-pocket for your site selection services and commercial real estate expertise?
Just like with residential real estate transaction, fees for our services are typically paid by the landlord, therefore there is no fee or charge to a new Shuckin’ Shack franchisee. They get an experienced broker, that's negotiated countless restaurant locations throughout the southeast, and they get a local representative in that market also for absolutely zero investment.
We wish to thank Vijay for this insightful interview, and the entire team at Trademark Properties who have helped open nearly all 15 Shuckin’ Shack Oyster Bar restaurants. If you are considering new restaurant opportunities in Tallahassee, FL next year, please visit this special page to learn more about the Shuckin’ Shack Oyster Bars!