Wednesday, June 30, 2004
The Lease Is Signed and Shipped
After chasing everybody down and getting all of the required witnesses and notaries to do their job, we finally signed the lease with the mall. I drove over to our local Kinkos and dropped the large FedEx box into the slot. I don't know if it was that I was staring at the sun for a while or the fact that I knew that I had just entered into a very large commitment, but my head was spinning.
Monday, June 28, 2004
Initial Concept Drawings
I've started working with Eric, the designer, on the store concept drawings for the first Chippery unit in Wellington Green. Friday afternoon I got the first draft of Eric's proposal (pictured below). I have to say that after taking a look at the existing space, I think we're going to have to do more work than I originally envisioned in order to get the right experience for our customers.
This design is nice in that it wont cost us much money in leasehold improvements, but it also doesn't look like much has changed from the existing tenant. I'm afraid that we would be seen as a temporary tenant. I think we'll have to remove the conter starting at the left end of the store and ending at the middle column. We can then display the raw potatoes, yucca, plantains and other vegetables in the three foot section at the far left. This space would be covered by glazing from floor to ceiling. After discussing it with Jim, I think the best space for the cooker is as close to the lease line as possible between the first and second columns. There's a structural column inside the store that may make this difficult, but if it's possible, it would make a huge impact. The cooker would have to be placed so that it's facing the inside of the store so that the chips would then cascade off of the machine to the right (when viewed from the outside of the store). The would land in a chip tree display right by the middle column. There would have to be a counter after the middle column to house the chip theater and a cash/order station. The far right hand side would still be a merchandising space that customers could walk into. There would be glazing from the right demising wall to the third column and shelving space along that wall for merchandising.
When viewed in plan mode, the cooker would be placed between the first and second columns from the top. The wall directly behind this space would have a work surface for bagging and maybe several chip tree displays to hold finished product. This layout would leave enough room for storing cases of potatoes along the top wall and would also let me have a refrigerator in the back-of-house area.
This design is nice in that it wont cost us much money in leasehold improvements, but it also doesn't look like much has changed from the existing tenant. I'm afraid that we would be seen as a temporary tenant. I think we'll have to remove the conter starting at the left end of the store and ending at the middle column. We can then display the raw potatoes, yucca, plantains and other vegetables in the three foot section at the far left. This space would be covered by glazing from floor to ceiling. After discussing it with Jim, I think the best space for the cooker is as close to the lease line as possible between the first and second columns. There's a structural column inside the store that may make this difficult, but if it's possible, it would make a huge impact. The cooker would have to be placed so that it's facing the inside of the store so that the chips would then cascade off of the machine to the right (when viewed from the outside of the store). The would land in a chip tree display right by the middle column. There would have to be a counter after the middle column to house the chip theater and a cash/order station. The far right hand side would still be a merchandising space that customers could walk into. There would be glazing from the right demising wall to the third column and shelving space along that wall for merchandising.
When viewed in plan mode, the cooker would be placed between the first and second columns from the top. The wall directly behind this space would have a work surface for bagging and maybe several chip tree displays to hold finished product. This layout would leave enough room for storing cases of potatoes along the top wall and would also let me have a refrigerator in the back-of-house area.
Wednesday, June 23, 2004
Clip-n-Seal
I first read about these ingenious little contraptions several months ago on IDFuel and thought that it would make a great impulse item to place right by the cash wrap at our store. Well, today I called them up to see if this was possible. Not only is it possible, but they have sold branded versions of the clips to other customers in the past.
Slow Review Cycle
Well, we've negotiated all the terms for the lease and have in essence agreed to pretty much everything, but when we got the lease form back there were a few things we needed changed. We received the "final" lease form on Monday and we replied with our comments on Tuesday. Unfortunately, we haven't received the real final version yet so we're still lease-less.
On another note, we're supposedly getting the first drafts of the store design from the guys in Canada on Thursday morning. I have a conf. call scheduled with the designer for tonight at 8:30 to guide him through the space as it stands now. I hope they turn those drawings around fast, because we're down to 38 days to go until our August 1st deadline. The landlord still has to approve the design and issue the kickout letter to the current tenant. Once that letter is out, the tenant will have 30 days to exit the space. This gives me 8 days to get the design approved and still meet my deadline.
On another note, we're supposedly getting the first drafts of the store design from the guys in Canada on Thursday morning. I have a conf. call scheduled with the designer for tonight at 8:30 to guide him through the space as it stands now. I hope they turn those drawings around fast, because we're down to 38 days to go until our August 1st deadline. The landlord still has to approve the design and issue the kickout letter to the current tenant. Once that letter is out, the tenant will have 30 days to exit the space. This gives me 8 days to get the design approved and still meet my deadline.
Thursday, June 17, 2004
Pricing a Premium Product
The subject of pricing has come up several times in the last month or so and today, Rob the BusinessPundit had a post (pointing to an article on CFO.com) that discusses the pitfalls encountered when pricing new products.
Here's my situation... Our (projected) most popular item will be the "quick fix" bag which holds about 2.5 oz of potato chips. These are what I consider a premium product because they're cooked within minutes of when a customer orders them and they are seasoned directly in front of the customer. We use only the best ingredients and non-hydrogyneted oils to ensure that they are indeed the best chips our customers have ever eaten.
The market price for a 2 or 2.5 oz bag of mass-produced chips is approximately $0.99. These chips have been in a bag for an undeterminable amount of time and can contain all sorts of preservatives and/or cooked in less-than-healthy oils. How do you quantify the premium to charge for our freshly prepared chips? I'd also like to point out that our 2.5 oz bag will more than likely be overfilled on average. Would a price of $1.49 be too high? How about $1.89? I would like to keep the average sale for a bag of chips, a small container of dip and a soft drink to be at or under $5.00. I would really like to get some feedback from the two or three of you that read these posts routinely.
Here's my situation... Our (projected) most popular item will be the "quick fix" bag which holds about 2.5 oz of potato chips. These are what I consider a premium product because they're cooked within minutes of when a customer orders them and they are seasoned directly in front of the customer. We use only the best ingredients and non-hydrogyneted oils to ensure that they are indeed the best chips our customers have ever eaten.
The market price for a 2 or 2.5 oz bag of mass-produced chips is approximately $0.99. These chips have been in a bag for an undeterminable amount of time and can contain all sorts of preservatives and/or cooked in less-than-healthy oils. How do you quantify the premium to charge for our freshly prepared chips? I'd also like to point out that our 2.5 oz bag will more than likely be overfilled on average. Would a price of $1.49 be too high? How about $1.89? I would like to keep the average sale for a bag of chips, a small container of dip and a soft drink to be at or under $5.00. I would really like to get some feedback from the two or three of you that read these posts routinely.
Mall Lease Negotiations
Yesterday I sat in a conference room at the mall with Jim, our real estate consultant, and Al, the mall leasing manager, and we had Kim, our attorney, and Tom, their attorney, on the phone. All in all, everything went very smoothly. They gave on many points and we had to come to some compromises on a few terms but things went very well. Very well, that is, until we got to the deal breaker!
Unfortunately, I don't feel comfortable publishing the details of the lease so it will have to suffice to say that it was a clause in the guarantee whereby we would be severly limiting our defenses. Alex would not sign the lease or the guarantee if this was in there therefore I wouldn't sign either. I got Tom to start working on the updated lease and promised to have Alex discuss this with Kim to come up with some sort of compromise.
After several conversations and some research on Alex's part, we found that the clause was enforceable. Alex and I discussed it and I let her know that unless they were willing to change the language to something she would be comfortable with, that we would walk away from this mall and pursue one of the contingency plans we had set in place for just such an incident. At one point during her conversations, she actually had to tell Tom that it was over and we were going to move on but in the end, they were able to update the language to something that we could live with.
The negotiations that had transpired on the previous day were not nearly as exciting. Since I have very little experience with these precedings, I let Jim handle the majority of the business terms and jumped in where there was something that had to be clarified. I'm very happy with the outcome and I greatly appreciate all the work that Jim has put into this project. It's the best money that I've spent.
Unfortunately, I don't feel comfortable publishing the details of the lease so it will have to suffice to say that it was a clause in the guarantee whereby we would be severly limiting our defenses. Alex would not sign the lease or the guarantee if this was in there therefore I wouldn't sign either. I got Tom to start working on the updated lease and promised to have Alex discuss this with Kim to come up with some sort of compromise.
After several conversations and some research on Alex's part, we found that the clause was enforceable. Alex and I discussed it and I let her know that unless they were willing to change the language to something she would be comfortable with, that we would walk away from this mall and pursue one of the contingency plans we had set in place for just such an incident. At one point during her conversations, she actually had to tell Tom that it was over and we were going to move on but in the end, they were able to update the language to something that we could live with.
The negotiations that had transpired on the previous day were not nearly as exciting. Since I have very little experience with these precedings, I let Jim handle the majority of the business terms and jumped in where there was something that had to be clarified. I'm very happy with the outcome and I greatly appreciate all the work that Jim has put into this project. It's the best money that I've spent.
Monday, June 07, 2004
First Round of Comments Away
It's taken us (Attorney, wife, consultant and self) approximately two weeks to digest the details of the 67-legal-sized-page lease package from the mall's leasing company. Today we replied with a 10-page document detailing all of the terms we needed changed. To be fair, the lease isn't the entire 67 pages. It's broken up as follows:
Our comments, which were just on the main business points of the lease, not simply inserting "reasonably" here and there, were a total of 9 pages. We've sent them to the mall's attorney so now we have to sit and wait for a response.
- Cover page (1 page)
- Table of Contents (2 pages)
- Data Sheet (2 pages) - This is a sheet that details the business terms for the lease such as minimum rent, allowed use, radius, promotional fees, etc.
- Acknowledgements (2 pages)
- Standard Form (31 pages) - The real meat of the lease. Here is where they list the ways they can screw you.
- Construction Requirements (11 pages) - These are the main requirements for building out the space.
- Utility Requirements (3 pages) - These are the power, plumbing and other utility requirements for building out the space.
- Design Drawing Requirements (2 pages) - These are the requirements for the space design drawings.
- HVAC Requirements (2 pages) - These are the heating and central air conditioning requirements.
- Guarantee (9 pages) - The terms of the guarantee for the lease. Three pages per guarantee per guarantor.
Our comments, which were just on the main business points of the lease, not simply inserting "reasonably" here and there, were a total of 9 pages. We've sent them to the mall's attorney so now we have to sit and wait for a response.
Tuesday, June 01, 2004
Design Package Is Here
The Taubman Design Package for the WG space got here today. It's basically two CD's filled with the as-built drawings, the design criteria and the drawings for all prior tenants. It seems that the first tenant for our space was a place called CinnZeo. Not much has changed since their original design. Looks like the current tenant just changed the name on the bulkhead.
The next step for us is to provide these plans to the guys that will be doing our design. I have some Ideas for the space, but I don't want to incur too much costs to renovate so I may be forced to not change too much either.
The next step for us is to provide these plans to the guys that will be doing our design. I have some Ideas for the space, but I don't want to incur too much costs to renovate so I may be forced to not change too much either.
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