Feel Good Edition 2

CENTRALLY-OPERATED FRANCHISE AGREEMENT FUNDING PARTNERSHIP JOINT VENTURE PARTNERSHIP MANAGEMENT AGREEMENT SEGMENTS STANDARD LEASE AGREEMENT MODEL CUSHMAN & WAKEFIELD COMMENT Suitable for low-financial-return operations Worth considering for well-known brands Often agreed for ‘big ticket’ projects (e.g. arenas) Increasingly common for tie-ups with specialist operators Hotel-sector-style deals are finding favour for some market segments (e.g. food halls) Can work well for a limited number of formats (e.g. cinemas and standalone venues) The good news for landlords is that there are a variety of operating models to choose from. However, the choice of which one will be most appropriate for an individual venue (together with the operating team required to make it work) is likely to depend on many factors and will almost certainly require expert advice. In leisure, one size definitely does not fit all. THE CO-FUNDING/OPERATING DILEMMA ONE SIZE OF OPERATING MODEL DEFINITELY DOES NOT FIT ALL Standard lease arrangements for the most common commercial real estate uses (retail, o ces, logistics) establish a straightforward relationship between lessor and lessee. In the leisure sector, however, the relationship between landlord and tenant can be more complex – though equally, and possibly even more, rewarding for all. 06 | THE FEEL GOOD TRILOGY | EDITION #1 2 OPERATING MODELS This greater complexity is due to two key factors. Firstly, the sheer diversity of leisure uses creates a multitude of individual requirements in terms of floorspace, footfall and physical presence, and consequently makes standardisation di cult. Secondly, reflecting the more bespoke nature of individual venues, leisure tends to demand significantly higher capital expenditure than other uses. As leisure occupiers increasingly look to share the risk of their ventures, landlords are correspondingly more likely to be invited to co-fund and/or operate leisure operations. Whichever model is chosen, and whatever decisions are made around concepts, one end goal should always shine through: that of making the customer feel good. We will cover further tips for landlords in Edition #3.