Emotional Rescue

By: Jack Intrator, CPM, RAM, ARM, Zommick McMahon

 

When dining at a restaurant, the process is one of emotion. The sensation of touch, taste, sight and smell are all immediate and a part of the overall experience with sound and mood/environment secondary perceptions derived from the first four. If we consider the above are all factors in our experiences when dining, then let’s consider how magnified these become when working on an independent restaurant deal. 

In a typical big box operation for a retailer, a Target, best Buy or a Supermarket or even a Restaurant like a Lone star, Ruby Tuesday or an Olive Garden, the decision makers on the tenant side are often a VP of operations, or VP of real estate. Most of these types can only focus on specific market conditions and demographics, a business model that illustrates criteria — they have never been the restaurant operator or the chef/ owner who truly feels the experience and that point of view.

The chef /owner is a very different sort. Their motivation is twofold, and of course they are motivated by the business and the financial gain that in their opinion will accompany a successful concept and operation. But they base their decision by emotion, a feeling they have for the location and their vision. They are passionate about their concept and their decisions can be based on some of the same criteria as the bean counters in the national chains, but there is more, much more. There is a passion for the business, the vision of how they see themselves and their concepts. They are the dreamers who know the emotional experiences of dining and it gives them pleasure, when they create the panache, and a diner is happy with their experience.

Often times when we work on a restaurant deal, whether in a shopping center, in a building on a city block or a new development, we are presenting opportunities to our clients, the independent operator with information that is put together and directed for a typical retailer. Demographics are provided but little information on disposable income and certain specific aspects of the market we need to assemble ourselves. When a typical broker presents the opportunity they present in a vanilla sort of way, and often do so with no clear or definitive difference between a big box dry goods retailer, a bank or an independent restaurant operator. Sometimes we get information that can be deemed antiseptic. The Restaurant Specialist That’s where the restaurant specialist comes into play. We are there for interception; we are the buffer from the Chef/owner operator to the VP of Real Estate working for the Landlord. We need to immediately process the information and present it in a way that our client both understands and appreciates because we know, we understand that this deal will be completed by the passionate operator, the business terms of course, and the emotions of the deal. We need to get our clients into the space, let them touch the space, let them see themselves and their concept in the space and let them conceptualize their bottom line.

When working with a cold business process, like a big box or national retailer where the VP of Real estate or a Property Manage does not really care if the tenant is a card store or a restaurant operator and only sees the bottom line. They see who will pay the most rent, request the least amount of fit-out, and who will accept a typical vanilla shell–this is the hardest deal to make. But, when you get a chance to sell the deal, the concept to the Landlord, explaining the attributes of the tenant and of the deal and the benefit of increased visibility and foot traffic, site recognition and the perception of their patrons then there is a chance for a connection–an emotional connection between the chef/owner operator and the landlord directly.

Often I see when the chef/owner is describing his concept he embraces it. He envisions it and is excited by this concept and a good landlord sees this spark and passion and wants this concept for the operator and for his tenant. That is when good deals get born. When you only look at the bottom line of each deal then you might as well focus on the card store. If there is a chance to capitalize on a situation and bring both parties together, even if your dollars PSF apart then the old adage “Bring them to the Table” is implied.

I like to bring the client and the landlord to the table as soon as I get a commission agreement signed. Having a face-to-face meeting is often all that is needed to see if there is a real chemistry between a landlord and an operator. You can’t get chemistry going with a property manager or the VP of real estate, because they are not entrepreneurs, not the decision makers on their own. But when you get the owner/developer across the table from the chef/operator that is when you can see progress that would otherwise not be forthcoming because the operator has given in his mind the limit of the deal, the VP of Real estate has given all he is allowed to and there is a polarization that takes place and heels are dug into the ground. Even the skilled broker, a restaurant leasing specialist who knows the concept, understands both positions and understands what needs to be done to push the deal over the line, is often at a loss as there seems no real movement on either side. No opportunity to make the deal, but other brokers who chose to specialize in this arena will push the deal forward because they truly grasp the art of the deal. They will go the extra mile, have the straight talk express with the chef/operator and with the landlord and get them both to the table. Work the deal out on the table and either make a deal or move on. You can call these aggressive negotiations but it is this type of negotiation that is the only thing that may save a deal from collapsing.

At the end of the day, when we understand the difference between big boxes, a national chain and the independent chef/owner, we are truly in a position to provide sound advice and the emotional rescue to close the deal with both sides feeling like winners.

(Article Source)

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