Aug08

One of the hidden reasons for the doors closing!

(08 /08 /2013)

How many times have you seen a really popular establishment, one that is always busy, suddenly shutting up shop?  Why?  So many times I hear that the rent was the issue, it just continued to rise.

The business and the landlords seem to have started with a great relationship! The business owner has the perfect location and the landlord a tenant paying off his mortgage or straight into his retirement fund! But then the relationship sours! Someone wants more and the rent goes up! Again and again!

Many operators feel that because the business is busy, landlords seem to think that they can afford to pay more. Rents should equate to only 10% of costs and with the every growing increases in everything else, there is really no room move.  The competition for the leisure dollar is on rise and it is harder and harder to increase your menu prices to compensate for the rent rises, making it simply too expansive to stay open!

Isn’t it better to have a building with a tenant earning them an income, rather than premises with no tenants and no income?

And in most cases, the landlord isn’t willing to budge and therefore it remains empty!  So everyone loses…the business owner as he has nowhere to operate from and the landlord with a empty shell

Go figure!!

I wonder sometimes what has happened to the idea of working together towards a common goal so we can all reap the benefits later.  Simple business sense perhaps?


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