The chicken chain sounds like the best bet. However, I'm wondering if the $300K investment includes their equipment or if is just building improvements. If they would be willing to pledge their equipment as security for the lease you would be able to retain it if this unit goes out of business. If this is a possibility, get your attorney to help you draft the appropriate language and prepare a UCC filing. If this all falls into place you have a "ready to go" restaurant location if this franchisee closes up. Otherwise, the equipment will be pulled out by either the franchisee or his banker and the space may not look very pretty when you regain possession. In summary, the residual value of the $300K investment may not be of much benefit to you if the space is torn up and all the equipment removed. Chances are good that they will object to this approach (since the equipment is probably being financed by a bank) but it's worth a try.
In the event you do a nail/hair salon elsewhere in your project, use caution as these operations can generate smells that neighboring tenants may have a problem with. Be certain that shared walls are properly sealed to prevent odor transfer and have the tenant install plenty of exhaust fans that remove the smells to a location that does not allow the odors to be drawn into the neighboring space. There have been some new advances in the chemicals used for nails and perms that generate fewer odors and are more environmentally friendly. Thus, you may want to quiz this type of tenant about their chemical use, etc.
Oct 22, 2010