Foregoing A Site Survey Can Sink Your Ship

Updated: Sep 26, 2019

You wouldn’t buy a used car without having a trusted mechanic giving it a thorough check. You certainly wouldn’t buy a house without a home inspector. So, why wouldn’t you do the same when it comes to selecting a commercial space for your new store? Yet many franchisees forego a site survey thinking that data received here and there will suffice. The money spent on a survey is better spent elsewhere the thinking often goes.

Nothing could be further from the truth.

As many experienced franchisees have discovered, sometimes the hard way, you can’t be penny wise and pound foolish. Data becomes a precious commodity in the beginning stages of ownership. Finding the right space with your commercial real estate broker will take more time than you might have expected. And once you've narrowed your choice down to that one can't miss space, it's time to get a site survey.

A completed site survey gives the franchisee a deeper understanding about every aspect of the physical space he or she is about purchase or lease. The survey provides a clearer picture of potential construction costs, highlights physical problems with the location and points out conflicts between what the location has and what the franchisor will require of a franchise location. A site survey should be commissioned before a purchase agreement or lease have been signed as this vital information gives the franchisee more power to negotiate. The survey also becomes an important initial roadmap for the architects and engineers tasked with designing the space.

Site surveys can vary greatly in terms of scope and level of detail. A good survey should provide only the information a franchise owner needs in order to move forward with lease negotiations, franchisor approval, design and construction. Keep in mind when selecting a surveying firm that a thicker report doesn't necessarily mean more relevant data. And while drones and lasers are impressive tools, they are only as good as the person using them. It is our recommendation that a survey team should be under the guidance of licensed architects or engineers that understand what the data means.

Our Standard Survey looks at six major elements of the space:

  1. The site and its accessibility

  2. The building and its accessibility

  3. The mechanical system

  4. The electrical system

  5. Plumbing (water, sewer and gas)

  6. Fire protection

With photos and detailed data collected in each of these areas and an accurately dimensioned floor plan, the site survey allows the franchisee to see the bigger picture. A recent survey we performed showed a difference in the size of the space compared to the square footage the lease was stating. The landlord verified our results with his architect and concurred with our findings. This one detail will save the franchisee $80,000 in rent over the term of the lease.

It should be noted that a typical site survey is intended only to provide information on existing conditions. But that doesn't necessarily give you the whole story. That's why our surveys contain what we refer to as a Gap Analysis. That is best explained as the difference in what your space has and what you need it to have and it can make or break a deal. Here are a few examples of what a Gap Analysis can tell you.

  • The building has accessibility issues with no ramps to the space and no handicap parking spaces. The city will require you to spend up to 20% of your construction costs your building plans.

  • Your medical space requires fire sprinklers and you preferred space doesn't have them.

  • Your new restaurant requires 600 amps of electricity but the survey only found 200 amps for your use. You could get by with 400 amps if the building has gas, which it does, just not to your suite.

  • Your new space requires a 2" water line but currently is only served by a 1" line. This will require a new water service and meter at the street.

Now armed with photos, an accurate floor plan, a detailed survey of critical building elements and a Gap Analysis, the franchisee is in a much better position to make decisions, negotiate a deal, execute a lease, and get the architect started on creating a meaningful and useful space for their new business.

A comprehensive site survey costs a tiny fraction (less than half as percent) of the overall construction costs. But it can easily be worth tens of thousands of dollars if it identifies potential problems that could impact a lease or purchase decision. In summary, a site survey usually provides a very good return on investment.

You May Also Be Interested In:

  1. Franchises Could Benefit From A Permitting Partner

  2. A Site Survey Can Save Your Time, Your Money, And Your Sanity

  3. What is an As-Built Drawing, And Why Do You Need One?

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