Navigating a brewery lease renewal can be an exercise in frustration.
Your landlord wants to charge more because property values are going up and so are market rate rents.
You want to pay less because sales are down, expenses are up, and the bottom line is suffering.
Walking away from the space isn’t a good option, as you’ve invested so much. But paying the rent increases isn’t sustainable either.
So, what’s a brewery owner to do?
For starters, here are three steps you can take to navigate the lease renewal:
- Establish a negotiating strategy
- Define your ‘deal breakers’
- Know your numbers
#1 Establish a negotiation strategy
Begin with the end in mind. Write down your desired outcomes, concessions you’re willing to make, and your non-negotiables.
In other words, define what a success looks like at the end of the negotiation.
There are no assurances you’ll get everything you want, but you will clarify the top priorities you want to achieve.
#2 Define your ‘deal breakers’
Be prepared to walk away if the terms and conditions don’t work for you or your brewery financials.
Easy to say, hard to do, and an essential negotiating tactic.
Start with your list of deal breakers. Get clear on what is unacceptable or unsustainable for your brewery finances.
#3 Know your numbers
Do some research on the market. Hire a broker. Find out what lease rates look like for comparable locations.
Do some research on your brewery financials. What does the financial picture look like if rent goes up? How much of an increase (if any) can the brewery support? What other costs could be cut, if absolutely necessary, to stay in the same lease space?
Navigating a lease renewal can be difficult. But it’s a little easier once you define success, outline your deal breakers, and know your numbers.
Do this next:
- Watch the video: How to Navigate a Lease Renewal
- Learn about the network of brewery owners and managers
