Quote:
Originally Posted by blueash
I was told by a business owner who was considering moving on site that the lease he was offered not only included a base rental cost that was higher than being off site which he understood, but also had a requirement for payment of several percent of his sales to the ownership. That he found unacceptable as he felt he was being asked to continuously pay more as became successful.
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That is standard for stores in Malls. I worked for a Mall developer. We give the space away to the big anchors like Macy's and charge a base rent and percentage of profits to the stores. Some may say it is unfair but it is the Maill that draws the people and they should share in the success of their efforts to draw more people. Lets face it, there are Gap stores all over the place so it is not the store in the Mall that is drawing the people there but rather that the Maill marketing efforts bring more people to the Mall to make it possible for that individual Gap store to sell more.
Any business is free to build outside of the Mall but for some reason many choose to pay the rent plus percentage of profits to be in the Mall. Same kind of thing with the town squares.