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How a Tropical Smoothie Cafe Franchisee Saved $400,000 in CAM Charges with Leasecake
Background
Serve Hospitality Group opened its first Tropical Smoothie CafĂ© location in June 2016, and has grown into one of the largest and top-performing Tropical Smoothie CafĂ© franchisees in the Midwest. With an impressive track record of opening an average of seven cafes annually since 2021, they currently operate 28 locations across Michigan, Illinois, and Wisconsin, with plans to expand to 40 within the next three years.Â
Challenges
Before discovering Leasecake, Serve Hospitality struggled with an inefficient lease administration software that simply wasn’t getting the job done. The company relied heavily on manual processes and spreadsheets, which were time-consuming and error-prone. Adding new locations was a cumbersome task that required emailing the software’s support team, making the system dependent on replies and causing delays. The existing platform lacked user-friendliness for adding, viewing, and downloading contacts, and it offered poor visibility of location details. Additionally, Serve Hospitality faced significant challenges managing CAM (Common Area Maintenance) charges, taxes, and insurance reconciliations due to a lack of clear visibility into the base lease and the monthly breakdown of these expenses. They needed a better solution to streamline and improve their lease management processes.
Serve Hospitality is one of the largest and top-performing Tropical Smoothie Café franchisees in the Midwest.
Serve Hospitality Group has grown to an impressive number of 28 locations in the states of Michigan, Illinois, and Wisconsin since opening their first Tropical Smoothie Cafe in 2015, with plans to expand to 40 locations within 3 years.
Total saved in CAM charges after partnering with Leasecake
Total Locations Since 2021
Total Locations by 2027
Solution
Serve Hospitality made a pivotal decision by choosing Leasecake for its intuitive, user-friendly platform that revolutionized their lease management. The ability to effortlessly add and manage locations without needing external support was a massive advantage. Leasecake’s centralized system, automated notifications, and advanced reporting capabilities supercharged their operational efficiency and slashed the risk of missed deadlines. With Leasecake, Serve Hospitality gained precise financial breakdowns for each location, enabling them to spot and challenge any discrepancies with landlords. This powerful tool transformed their lease management process, turning a major pain point into a streamlined, efficient operation.
“By closely analyzing yearly changes, we can quickly spot unusual spikes or inconsistencies in charges. This capability allows us to challenge incorrect charges and secure refunds from landlords.”
Salem Najjar
CEO & Founder, Serve Hospitality Group
Results
Partnering with Leasecake’s Real Estate Professional Services Team, Serve Hospitality unlocked over $36,000 savings in CAM charges across its 28 locations in one year, translating to over $400,000 over the life of the portfolio. These savings came from correcting CAM overage charges, accurate tax assessments, and optimized insurance premiums. Some standout examples include:
- Location 1: The landlord billed CAM charges at $4.75 per square foot, while the lease agreement capped it at $4.30. Leasecake flagged this discrepancy, and Serve Hospitality presented a detailed analysis to the landlord. The landlord acknowledged the error and issued a refund. Future CAM billings were adjusted to comply with the $4.30 cap.
- Location 2: CAM charges included “Roof Replacement Reserves,” which were not allowable under the lease agreement. Leasecake identified this incorrect inclusion, and Serve Hospitality raised the issue with the landlord, supported by lease documentation.
- Location 3: One lease specified a cap of 3% on annual CAM increases, but Leasecake revealed a 5% increase. Serve Hospitality contested this with the landlord and received a refund for the overage.
Centralizing all lease data in Leasecake’s platform allowed Serve Hospitality to manage everything seamlessly, from contacts and lease documents to CAM reconciliations and financial breakdowns. This comprehensive approach streamlined data analysis, enabling rapid and accurate financial assessments. Having all information readily available on one screen ensured compliance and prevented unnecessary financial discrepancies.
“Centralizing all lease data in one platform is extremely beneficial, as it allows us to efficiently manage everything from contacts and lease documents to CAM reconciliations, year-over-year increases per square foot, and financial breakdowns of controllable and non-controllable CAM, insurance, real estate taxes, base rent, and more.” – Serve Hospitality CEO
Operational Efficiency and Strategic Planning
Leasecake has streamlined Serve Hospitality’s tech stack and operations. Its multi-purpose functionality, including unique features like Cakebot, Leasecake’s AI tools, offers clear advantages over other solutions. District managers and directors now use Leasecake as a one-stop shop for vital documents, eliminating the need to navigate complex back-office systems.
“Having all this information readily available on one screen ensures we can easily verify if the landlord’s billings align with our lease agreements, thereby maintaining compliance and preventing unnecessary financial discrepancies.” – Serve Hospitality CFOÂ
With Leasecake, Serve Hospitality is simplifying lease management, ensuring compliance, and reducing administrative burdens. Real-time insights and automated reminders are efficiently handling critical obligations, boosting growth and strategic initiatives. By leveraging Leasecake’s advanced tracking and reconciliation features, Serve Hospitality proactively identifies and resolves CAM, insurance, and tax discrepancies. This action reduces administrative overhead, allowing the team to focus on strategic goals.
Additionally, Serve Hospitality is optimizing lease administration and reporting across all locations with Leasecake’s reporting and analytics features. Using data insights from Leasecake, the company negotiates better terms with landlords and service providers, securing more favorable agreements today.
“I highly recommend Leasecake to streamline operations and boost efficiency across the board. Leasecake centralizes lease data, automates critical notifications, and offers robust reporting tools that enhance decision-making. With Leasecake, we ensure compliance, minimize risks, and optimize lease performance, freeing up time and resources to focus on strategic initiatives and business growth.”
