Starting or buying a business at Freo Markets

According to FMPL:
“The Markets’ philosophy is that a wide range of traders should present goods of quality, value and interest at competitive prices. Fremantle Markets is an entertaining place, whether you are visiting or bargain hunting.

Fremantle Markets is a community amenity and meeting place, and over the past 35 years has become an outstanding cultural, entertainment, restaurant and retail centre, without equal in the State.”

The tricky spin or blatant propaganda is just mind-boggling. Value at competitive prices and bargain hunting? The massive rent hikes drove out almost 30% of the tenants and the rest have had to index the cost into product prices.
Community meeting place and cultural centre? It used to be the community hub of Freo, but now it’s just a few plastic chairs, hiding empty stalls, that they refer to as relaxed sitting areas or now a community meeting place.
Is there a restaurant in there?
Entertainment? They must mean the buskers outside the market wall or the music in the bar which I believe is provided by the bar owner not the market management. Perhaps they think that the food hall in the mall is theirs as well.
Well, it all sounds good and might impress a naïve potential tenant and that’s what it’s all about. A nice little lead in to their Expression of Interest application form.

It doesn’t quite come right out and state that before you get to see the lease agreement the need to supply your first born child as collateral but it comes pretty close.

It is really hard to sell a business in the markets for a number of reasons; high rents and lack of facilities being the most obvious.

A lot has been said about people who have signed onto a 5 year lease because they thought that it offered secure tenure and that would make selling a business more viable or at least more stable for the buyer. Many of those people now feel stuck; locked in for 5 years with no way out. It’s no secret that due to the amount of empty stalls the management is now offering those spaces at no cost to new tenants. The bottom line of course, is that they are only interested in the rent coming into their pockets. The value of an established business is of no concern to them and might in fact hinder their agenda.

Some people have employed a business broker and others have advertised businesses for sale. A number of people have found a buyer and then the sale has fallen through when they have contacted the management to discuss the lease.

I am not even going to mention the lease other than to reiterate what I have said before, “Get legal advice before you sign.”

What many stallholders did not realize is that the potential buyers must sign an expression of interest form before they are offered a lease. Basically, the form is to guarantee the management that the potential buyer has enough assets to cover them if they should fail. I wonder if FMPL would provide the same information to their tenants. What guarantee do the tenants have should FMPL go bust?

What really concerns me most though is that FMPL demands a trail period. So, if you are lucky enough to find a buyer, your buyer pays you for your business, fits out the shop, buys stock and then after 10 weeks they can be told that they are unsuitable!!!!

If you haven’t read through the EOI form have a look at these excerpts:
Tenant Licence Agreements.
The successful applicant will be required to enter into a Licence Agreement with Fremantle Markets Pty Ltd for a period of 10 weeks to see whether it is successful for both parties. Nearing the end of that time both parties can sit down and discuss the option of entering into a long term arrangement.

Or this little beauty which says it all:
Whilst an attempt has been made to ensure that information contained in this document is accurate at the time of publication (April 2010), Fremantle Markets Pty Ltd does not accept any responsibility or liability for the accuracy of information contained in this document.

What Happens Next?

Applicants will not automatically be offered an interview and it is therefore important that you complete the attached Application Form as fully and accurately as possible. Photographs and other information relating to your proposed merchandise will assist in reviewing your application.

The assessment of application takes approximately 1 month and all applicants will be notified in writing of the outcome of their application.

The decision and outcome of your application is not open to appeal.

Please provide an itemised listing of your proposed product range (You must include photographs of merchandise to be sold).
What are your unique selling points?
What type of products could you could sell at cost price as per the Market Rules?
“Tenants must have at least 1 item of goods made available for sale to customers at Cost Price as an attraction to patrons on each trading day.”

How would your stall and product contribute to a vibrant and interesting Market? (Please give a full explanation eg. it is not sufficient to merely state that you are or have previously been a Tenant for any period).

Who are your competitors and what are the main points of difference that you will offer? (You should consider competitors both internal and external to Fremantle Markets)
Who is your target audience/customers?
In what ways will you ensure your stall operates in a sustainable and environmentally friendly way?
How many staff do you intend to employ?
What other tasks relating to the stall do you do during non-trading times and how many hours are spent on them?
How do you intend to train your staff so they will add value to your business and the Fremantle Markets as a whole?
What is your merchandising theme/display method and how do you propose to continuously improve your stall setup?
What capital improvements will you make to the stall including signage? What improvements will you make to the appearance of the stall? Please include estimated costs of improvements together with a detail plan of proposed changes. Please staple proposed plans to this application.
What is the proposed maintenance and cleaning program for the stall?
Briefly describe your marketing plan. (Other than relying on passing trade or word of mouth, how do you plan to get information about your product to your prospective customer?)
Please provide details of any previous retail business owned by you or retail experience (in each instance please provide dates). Include any relevant details such as qualifications or awards.

Financial Background
Plant & Equipment (currently owned and situated in stall, if any)
Already Owned – Item – Market Value – Service Cost

Plant and equipment to be purchased and installed in stall if application successful
Item – Purchase Price – Service cost

Personal Assets and Liabilities of Applicant
You Own: Cash available, Own Home, Other Real Estate, Superannuation, Savings/Shares, Furniture, Personal Effects, Vehicles, Other Assets. Total Value?
You Owe: Bills unpaid, Home Mortgage, Other Mortgage, Credit Cards, Vehicle Loan, Other Loan. Total?

What was that about a place for artisans, hand made products and an incubator for new start up businesses? I don’t think so…

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