Does Your Landlord S*ck? We can help. with Ben Pickard

[00:00:00] Hello, my friend on today’s episode, Ben and I talk about landlords. We talk about the importance of establishing a really positive relationship with your landlord. We talk about what happens when your relationship with your landlord goes South. And so for all of you out there who have a brick and mortar gym and really want to do your best to create a positive relationship with your landlord, or you’re thinking someday about opening up a brick and mortar gym and want to have a good relationship with your landlord.

This is a great episode for you. So keep on listening. Let’s get started.

Welcome to the business for unicorns podcast, where we help gym owners unleash the full potential of their business. I’m your host, Michael Keeler. Join me each week for actionable advice, expert insights, and the inside scoop on what it really takes to level up your gym. Get ready to unlock your potential and become a real unicorn in the fitness industry.

Let’s [00:01:00] begin.

Hello fitness business nerds. What’s up? Welcome to another episode of the business for unicorns podcast before we jump into today’s topic I just want to let you know that we have a free new tool on our website that we just put up there For many of you it’s hard to think of what are the right? Offers to make to your leads, to make people on your email list, to make people on social media, they’re going to get their attention and get them to take action.

So we put together a whole list of our best converting offers in one PDF that you can go grab right now. There’s a link down in the show notes. You can download it immediately. And it’s a list of all the best performing offers you can put in your social media, in your emails, in your In your marketing ads everywhere that you’re trying to get people’s attention and convert them.

So go grab that free tool and I hope you use it this week onto today’s episode. Welcome, Ben. How are you? I’m good, sir. Thanks for having me. Yeah. Let’s dive into today’s topic, which is actually something I don’t know that we’ve really ever officially dedicated a podcast to [00:02:00] on this podcast, like an episode to, which is how important it is to have a great, great audience.

Relationship with your landlord and both of us have had, you’ve had some good experiences here. I’ve had some good and terrible experiences here. This could be a whole therapy session if we let it. But before we dive in, can you just talk a little bit about for gym owners specifically, why is the landlord relationship so important?

That’s funny. It’s incredibly important. I feel like this whole podcast could be summed up as you need a good relationship with your landlord. Go make that happen. Bye. Yeah, that’s not enough. Why is it important for most of us, particularly if you live in a city or a town that doesn’t have a lot of available commercial units, or it’s very expensive.

If you don’t have a physical place to deliver your service, you don’t have a business. And I know how hard it is when you lose a staff or you’ve got disruptive clients or you have a problem. And I’m just trying to think out loud here a little bit, like, Your physical location is the thing that like, if you [00:03:00] don’t have that, you’re screwed.

Everything else, as bad as it sounds, is replaceable. Yeah, that is what a gym is. It’s a physical space that people come into, that they want to be in. That’s convenient to them. That’s hopefully well organized and well lit, maintained, right? They’re pretty comfortable. Paying to come into this space and for your coaching and community and all that.

But the physical space is so critical. I’m just going to yes. And you and add a few things. The other thing I think is so critical is that when you sign your lease, when you have a landlord that has negotiated in good faith with you and you can get a decent rate, you’re For your space that’ll like make or break your profit margin.

We have so many gems we’ve worked with who just could never be as profitable as they wanted to, or maybe still use the present tense can’t be as profitable as they want to, because they just are paying too much for rent. They pick a space that’s too big or they have a rate that’s too high. So like good relationship with your landlord means you picked one who is going to negotiate in good faith with you and get the best possible rate.

I’ll also say that in a [00:04:00] space like New York, where we all live literally on fucking top of one another, right? Gyms are a nightmare to try and spaces to try and find right between the noise and the vibration and the lots of people coming and going, there’s a lot, a lot of landlords who don’t even want gyms in their spaces on the flip side, in other markets, there are a lot of landlords who really want gyms because they attract people and they do add foot traffic.

And so I think finding a landlord who really gets the value of the Of what we’re doing is willing to build a great relationship and negotiate in good faith is really pretty critical to success. I can, without naming names, I can count on probably. I need more than both hands to count the number of Unicorn Society members who like really struggled in their business, primarily because of their landlord.

Wrong space, wrong amount, landlord who wasn’t very flexible. I also know there’s a lot of GMO owners who are thriving and got through COVID because of a great landlord, right? And so I just can’t stress enough how important this relationship is. So maybe let’s go through and [00:05:00] just give a kind of a few quick tips.

Okay. Thanks. And again, we have a playbook for this for our unicorns and members, which we won’t go through all of, but then you want to talk through what are some of the most important things to consider when establishing a relationship with a landlord? Yeah, I think right off the bat is when you’re about to assuming you don’t have a space, you’re looking for a new space.

This is day zero of the conversation. I think the first step is for your lawyer to review. And I know it sounds weird to say like the first step of a good relationship is get a lawyer to look at it. Cause that makes it sound like it makes it sound less good. But I do think that’s a really good point to make sure you have a clear understanding of what are the expectations of me as a tenant.

And what are the expectations of my landlord as a landlord so that we know when something goes wrong, because it inevitably will, a roof will leak, an air conditioner will break, a car might drive through the front of a storefront, which happened to my friend. Like we want to know what the hell is going to happen.

So we know where we should actually have some cash saved up and where we’re allowed to be frustrated or give praise if our landlord is delivering. [00:06:00] Yeah. Literally before we started recording this podcast, I got an email from a Unicorn Society member today about a landlord who won’t fix their air conditioning that’s broken.

Right. This is literally a daily occurrence, right? It’s a real issue. But I think this is, while you don’t, not all relationships you want to lawyer up at the beginning, this is one where you really need an outside eye to make sure that your landlord is actually serving you a lease that is legal, that it makes it clear what their responsibility is and isn’t, makes it clear how you resolve conflict.

If that, when conflict arises, make it clear how your rent escalates over time, makes it clear what your options are at the end of a lease, right? There’s some stuff that you as a new gym owner just won’t know to look for. And to find a local legal professional who can guide you is priceless. Cause if you get it wrong at the signing of this lease, there’s no going back.

You’re cementing in stone, some shit that’s either going to work for you or hold you back. Yeah. Alright, so let’s just assume people did that, Ben. What else, what other kind of tips and tricks do we have for them to try and keep this relationship a positive one? Yeah, [00:07:00] there’s two, three really important tips, but two of them in particular.

The first one is, I don’t know how to say this, but like try to be friends with your landlord to a certain degree and not like you’re going to invite them to your bachelor party. But like connect with them and thank them for stuff that they do and let them know what’s going on in your business. Because the way I think of these next two points together is it’s our privilege as tenants to be in their space.

They rent it to whoever they want. They bought this commercial building probably for financial reasons so that they make money off of it. I assume that’s mostly in Lawrence minus there’s probably a few who are altruistic, but they might not be your landlord. They’re here to make money. Yeah. They’re going to make their money from somebody.

Whether it’s you or not, how do you be their best possible tenant? Because then when push comes to shove, and I’ll get to the points in a second, but when push comes to shove on the air conditioner breaking or something going wrong, or just like an issue or whatever, Like they like you and you like them.

Now I know that might not be [00:08:00] as easy if you’re building is owned by some multibillion dollar corporation with different property maintenance companies. Like I get that, but there’s still a point person that you interact with that you can make a point to be on their good side and that’s going to be small things.

You’ll have to text them every week. And again, invite them to your bachelor party. Do you have a client appreciation event? Could you invite them to that, even if they don’t come, I did that. Actually, my old landlord came to my current spaces client appreciation event and brought his son and hung out and had beers with everybody.

It was awesome. Yeah. Can you write them a holiday card? Do you say thank you when they like, I don’t know, trim the weeds or put up new flower boxes or refresh the paint or whatever it is that they do, but show that you give a shit. Yeah. I think it’s, I think like any relationship, if you’re only going to them when you need something from them.

It’s not the best tone for a relationship, but you can go to them when you’re like, Hey, I want to invite you to something, or I want to say, thank you so much for taking care of that thing. Or I want to say how great this space has been working out for us. Or I want to say, I want to [00:09:00] share a win that we had recently, or I want to show you that we were just in a local newspaper, or I want to just include them in the ups, not just the downs.

I think it goes a long way. And to your point, Ben, I think we have at MFF, we’ve had at our original and current location in Hell’s Kitchen, we have a landlord that really treats us like family. Like we’re part of his Greek mafia family, which is probably real, not really a joke. And they do, they, we’ve been there for over a decade and they treat us like we’re a part of the family and we have an issue.

I’ll send someone over. I’ll send my guy, I’ll send my guy over right away. Like they really treat us like that. And because of that, we’ve become friends with like their sons used to have a business on the street that we knew and would sometimes come to our events. And so we’ve done our best to really keep in touch, whereas at our other location that we had to close during COVID, we were just a number on some spreadsheet for a giant international conglomerate who was faceless.

But to your point, there was a property manager person who we tried to really build a relationship with. We were relatively unsuccessful, but we did try all of these things. Uh, and I think we, we probably got farther [00:10:00] than most people who would have, who weren’t putting in that effort. But I think to your point, it’s easier with some landlords and others.

But still we want to try and develop a great kind of rapport with whoever our point person is to make sure that we don’t have such a one sided relationship. Yeah. I love that one. Yeah. What else? And I guess like furthering on that point, it’s like, aim to be a good tenant. So on one hand, it’s, you don’t want your landlord, you don’t want to establish a pattern of behavior that you.

Only go to your landlord when there’s a problem, because then every time you text them, their emotional response will be like, oh shit, what is it now? But you also want to do a really good job to be a good tenant. Some of this is meet the baseline expectations, such as pay your rent on time, be respectful to your neighbors.

I’d probably make friends with some of them. I’m in a building where there’s There’s now three other tenants. One of them has three of the units. Like we invite them to shit so that when something is a little bit of an issue, we can address it with the neighbor. Cause that happens now, I guess, speaking to my situation, like my landlord’s like a dude about my age and we’re on really good terms, but I [00:11:00] know I’ve, I discovered, and maybe this was one of the points here that my landlord’s motivator is that like, he doesn’t want to deal with what he would probably call like stupid day to day shit.

Yeah. He wants to focus on the, like making the building awesome. He doesn’t want to deal with like. Who restocked the toilet paper in the communal bathrooms and stuff like that. So when we have, our neighbor is an axe throwing place and a good percentage of the people who are a demographic of axe throwing also smoke versus not very many people who go to a personal training studio smoke, the axe throwing people smoke outside the door.

That the fact that I can address it with the axe throwing place and Craig doesn’t have to get involved. Craig’s my landlord. I know that’s a huge win for him. So by being good neighbors and paying my rent on time and trying to maintain a reputation within the building and in the community, like those are things that are motivators for my landlord.

And this is maybe going above and beyond the playbook a bit, but if you can figure out like, what are the motivators for your landlord, Like, that’s their love language, be a good tenant in that language. If they really care about all the financials and everything being perfect, do that. If they’re [00:12:00] really like, I want the building to look immaculate, spend 50 bucks and put out a planter box.

I think it goes away a long way, Ben, honestly, I think, you know, figuring out what your landlord’s love language really is or appreciation language really is, goes a long way. And our landlord feels the same way. He doesn’t want to deal with like the, Bullshit conflict between you and your neighbors. And so when we had conflict years ago, we had some conflict with noise and vibration with people who lived above the gym.

And so rather than put it on our landlord’s plate, we used like an arbitration service, New York city has like a neighborly arbitration service where you just call this third party and they will do like a phone arbitration to try and mediate your issue. So we did that instead of putting it on our client, on our landlord’s plate.

And he was so grateful that we didn’t have to bug him. With it, luckily we were lucky that it was able to get resolved through a phone call mediation and this third party, but it goes a long way to balancing the relationship. Yeah. That’s a great one. So what about, there’s one more, I think one of the things that we talk about a lot in our playbook and we help [00:13:00] Unicorn Society members with is thinking through renegotiating a lease.

When it comes up. So what are some kind of thoughts and tips for when renegotiating time renegotiation time rolls around? Yeah. And the same vein that as applies to most humans, that they don’t want surprises, especially when those surprises could be a bad surprise. It’s not always a birthday cake. It could be get that process started soon.

Even at whether you plan to continue or not, give at least a year’s heads up of to be like, Hey, here’s what we’re intending to do. Can we get the conversation going? It’s in your best interest to get the conversation going soon, because then if they’re like, Oh, it turns out I actually have to jack the rent by 300%.

You want to know, so you have lots of time to find a building or a new location. But it’s also shows really good faith from you as the tenant. If they’re like, Hey, we’d love to stay here again. This has been amazing. Can we start the conversation? The landlord must be thinking, Oh, this is like a responsible person who’s got their shit together.

Their business must be going well. If they want to continue, like it’s how you treat all stuff. If I’m going to invite you to something, like the more notice I can give you, the more [00:14:00] respectful it is of your time. And you definitely want to respect their time. Also, we have so much more leverage in the conversation when we start early because when we wait until the last minute, we don’t have any options.

If we’re planning to stay there and we start this conversation three, six months out from the deadline, then we’re screwed because that’s not enough time for us to go find a new place in most markets. And so I think the earlier we start, the more we can genuinely say, We’re willing to walk away if we don’t get some things that we want, but if we push it to the last minute, you don’t really have any leverage in this game because you can’t walk away.

That’s a, that’s a really good point. Yeah. And that, that’ll give you a lot of, that’ll give you the leverage when you can compare it to other things in the area to see a million Lord is increasing the rent by 10%, but. This place it’s five or that place is 20%. It lets you know what you can actually do. And it also can, if you start early, you also have a greater chance to just ask for more stuff.

So that even if they do, our line port is ask more things than you’re willing to accept. So that if you ask for 10 things, but you only need five, if you get that conversation going early, it shouldn’t be [00:15:00] lost on you, your listener. By you making your landlord’s life easier to keep going for them with consistent cashflow, because they know that you need to find a place, but you also know that they probably have to give that new person a few incentives.

They have to eat a couple months of rent. You’ve got a little bit of wiggle room there. And like, it’s good practice. Like I’ve talked to unicorn society members that are, yeah, my lease renews in like a few months. Like, when do you think I should get the conversation with them started? Like a year ago, maybe to know.

Yeah, 100%. So you don’t get screwed. Yeah. Let’s just talk through very briefly, the kinds of things. I think people get a little nervous about negotiating and asking for too much. And listen, we, like we said, at the beginning of this podcast, you all as listeners should go get a legal professional to help you with leases and help you understand what negotiate for, but I’ll just give you, I’ll run through a few examples, maybe Ben, you can think of some things too, of things that are typically on the table in a negotiation with your landlord.

So typically on the table is obviously the actual amount of rent. Typically on the table is the amount of free rent you get, right? Typically on the table is renovations and improvements in the space. Who’s going to do [00:16:00] them? Who’s going to pay for them? Typically on the table is how much your rent increases over time.

Typically on the table is like what you’re responsible for and what they’re responsible for, right? These are just like some of the basics of things that you can negotiate for. There’s other talking points too in terms of how common space is used, what signage is allowed or isn’t allowed. I’m trying to think of anything else that I know has been useful and on the table.

Obviously, the length of the contract is a big one that is totally on the table to negotiate. What else, Ben? Anything else I’m missing that has been useful? Yeah. The other big picture one that comes to mind is this is an opportunity to ask if you’re interested in a good guy clause. Meaning regardless of the term of your lease, how much notice do you need to give to walk away?

Just want to say explicitly what that is. It’s called different things, different places. Yes. I’ve heard it as a good guy clause, meaning let’s say I signed a lease for 10 years and I just signed it, but I maybe it was able to clue to a line in there that says, if I want to end my lease early, I can walk away with three, six, nine, 12 months [00:17:00] notice.

This can be really valuable, especially in a newer business that if you’re trying to feel things out or get to move to a different area. Upon lease accepting or initial lease or lease renewal. That’s something that they might be more willing to put in there. I had that my lease renewed over COVID and I had this conversation with my landlord where it’s like, look, my intention is to make this work.

We had always paid our rent on time. I think we even paid it early once. And I’m like, my intention is to continue forever and fucking COVID, can I get a six month good guy clause? And he’s like, yeah, that’s cool. But he was able to say yes, because of the context I gave him for that. It just wasn’t like, Hey, I want it out because I’m like, do you plan on staying?

It was all of this is weaved into the existing conversations and including things to your point with renovations. So you can get specific with that. Maybe you’re. Cool. Air conditioner is on his last legs. What’s on his last legs. You can hear it sounding like it’s on his last legs. This is a time to be like, I want to continue.

Can I do a 10 year lease? But you fix this or garage doors is one that we did at our gym to make really nice [00:18:00] black and glass garage doors. But there’s going to be some wiggle room in there because the headache you are saving them is that they don’t have to give other people three months free rent to move in.

So you can find things that speak their love language, but benefit you that speak to the mission. And have you both aligned? Yeah, I think those are great examples. And I think at this point, I think it’s probably fair to say that Fisher and I probably wouldn’t even consider working with a landlord who wouldn’t offer something like that.

Good guy guarantee or good guy clause, right? The idea that if I’m going to sign a 10 year lease and I don’t have a way out, if the business is doing really poorly, it just seems insane to me. And there’s some landlords who won’t in any market, they just won’t do that. But it just seems if we’re both operating in good faith and I can demonstrate to you that the business is having financial hardship, it’s better for both of us to just give you a heads up three months, six months, nine months heads up, and you let us out of this.

The lease with some notice still might sting for a business that’s really going under fast, but doesn’t mean I’m still on the hook for the next five years, eight years of, and especially if a business that’s going under that might [00:19:00] even file for bankruptcy, it’s better for the landlord to have this clause so they can start replacing you soon and not have to file it, file some sort of.

Court some lawsuit or go to some sort of what’s it called a debt collection agency. It just, it’s better for both of you to be able to negotiate upfront. What happens if this business goes south? And I think that’s a good example of something that, you know, you as a listener might not know if you haven’t done this before, and you really need a good legal professional to help guide you on things like that.

Yeah. Any other final thoughts here, Ben, as we wrap up this chat about landlords? Yeah, just like the big sweeping picture of, I know all generalizations are always not fair, but what I hear more is about coming from the perspective of what can my landlord do for me? And I’d encourage you to flip that conversation and think of it more of what can I do for my landlord?

I know that sounds weird cause you could justify being like, well, we’re paying rent and they’re making money off this. I’m paying their mortgage. Yeah. But that’s also the deal because they did. All of the hardships leading up to buying that commercial property. [00:20:00] So thinking through what can you do for them is going to always put you in their good books.

And that sometimes might be a break on rent. It sometimes might be like, Hey, this is really your responsibility, but I’ll fix it, but it’s how can you really serve them as someone who’s like genuinely grateful to be a tenant, assuming you are grateful and you like the building that you’re in, because I think that will just.

A few hundred bucks a year or a couple hours of work a year will give you a ton of good faith that I imagine the average tenant isn’t doing. And if push comes to shove, you’re still for the most part dealing with a human who’s going to make decisions based on some level of motion. And if they like you and they care about you, yeah, like that’s a fucking huge leap forward that ABC business might not have.

Yeah. That’s, that’s a great takeaway. I think that’s a good summary to abandon, right? Is you’re going to have a much better experience as your landlord. If you’re on their nice list instead of their naughty list, like things are just being much easier for you. If you’re like one of the ones they like instead of the ones that are pains in their asses.

And there’s lots of ways we talked [00:21:00] to this podcast about how to do that, but I think that’s the main takeaway. Bye. Yeah. Thanks, Ben. Great conversation. I thought it was maybe going to be a shorter episode because we’re talking about a non sexy topic, but we made it sexy and this was over 20 minutes. It’s the second biggest expense in most gyms after payroll and it’s something that is usually an afterthought.

Like, we’re going to spend 10 or 20 percent of our gross revenue on this thing. Yep. Let’s do something about it. Let’s make it a good relationship. Awesome. Thanks for the great conversation. And dear listeners, if you want to go grab that free new resource we have with all of our best, most high converting offers, go click the link in the show notes, go grab the free PDF, download it today and start using it.

Thanks again, Ben. I’ll see you on the next one. Talk soon.