All of us would have come across this famous Cafe Brand at least once in a while. Does Café Coffee Day strike your mind? Café Coffee Day is not only one of the most successful café brands but also a famous hangout place for coffee conversations in India. Three years back in 2019 Café Coffee Day had around 2000 outlets in 245 cities in India. But now, after the demise of V.G.Siddartha, the founder and CEO of Café Coffee Day, the brand went through lots of hardships and struggles and lost over 500 outlets in India which is accountable for 25 to 35% of its revenue. Although there are many reasons cited for the fall of Café Coffee Day, one of the major reasons is the lack of focus on critical funding decisions and lease evasion which led to the closure of 500 outlets. All these factors put together dropped the value of their shares by about 20%. Later Malavika Hedge, the wife of V.G.Siddartha stepped in as the CEO of the company and she mainly focused on the financial flaws and lease evasions made by the company earlier and started rectifying it thus evidently she is steering the business through its recovery stage
Ford’s Quit India movement
Ford was one of the first multinational automotive companies to enter India in the early 1990s. In spite of being a successful automotive brand in India for the past 25 years, the company went through a lot of struggles and downfalls in the last 5 years. Indian manufacturing plants of Ford are capable of producing 2,00,000 units of cars annually but sadly they have manufactured only 80,000 units of cars which incurred them a loss of 2 billion dollars. At the same time, ford vehicles failed to attract Indian customers in the past few years. Considering all these factors Ford motors decided to quit India. The official announcement from Ford motors shattered the lives of its 14,000 employees. Later TATA motors showed its interest in taking over the Chennai plant of Ford which holds about 350 acres of land area. At that time, Ford motors made a shocking announcement in public stating that they have lost 5 legal documents which include the lease agreement document issued to Ford by Chennai Metropolitan Development Authority (CMDA) to use the land for creating multiple job opportunities. The news that leading multinational car makers failed to maintain their legal documents started spreading worldwide, adversely affecting the brand image of Ford motors.
Stayzilla – Forerunner running out of business
Stayzilla is an online platform where people can list their homes/hotels for rent to travellers. For the initial 5 years, Stayzilla has been operating by the funding made by its two founders Sachit Singhi and Yogendra Vasupal with around 55,000 stay options across 4,500 towns in the country. After the arrival of Make My Trip, Ibibo, etc., Stayzilla decided to change its business model as the competition in the field started increasing. They decided to lease the homes/hotels/rental places for renting it to travellers and they started gathering funding to extend their business territories. In the first 4 rounds of funding, the company raised a massive 34 million dollars which are considered to be a milestone achievement for a startup company. But in 2017 various financial faults committed by the founders and the greed to expand the company enormously made them run out of funds. The company failed to pay the lease amounts to the vendors due to a financial crisis. Later both the founders of the company were put behind the bars for various financial allegations.
Lease Management and its importance
When we have a closer look at the above three companies stated, though they belong to entirely different sectors of business all three companies made a vital mistake in one common ground which led to their massive downfall. Yes, they failed in lease management. Café Coffee Day and Stayzilla failed to pay their lease on time as agreed by the vendor, Ford failed to maintain their legal lease documents. It is evident from this that whether you are starting a startup company or managing a multinational company the primary thing that you need to focus is on lease management.
The rental lease agreement is a legal agreement between the owner/vendor and the person who desires to use the property temporarily for a certain period of time. Both the parties will mutually decide the lease time, amount, and the time intervals to pay the lease amount. i.e., It can either be paid monthly, quarterly or annually. On the failure of lease payment, the vendor of the property has the right to take legal action against the tenant. On the other hand, the tenant has the right to hold the ownership of the property till the expiration of the lease agreement.
Why Lease Portfolio 365?
Running a business is like riding a roller coaster that never stops, there will always be unexpected ups and downs. There is N number of knots that are interconnected for running a business successfully. Even a single loosen knot would lead to a major downfall of the company.
Lease management software, like Lease Portfolio 365, relieves you from a significant risk by managing your whole property-related requirements. Lease Portfolio 365 is cloud-based lease management software that assists companies in managing lease payments, property-related papers, and other data and reports. In order to help businesses, we manage their reports, integrate their data, and provide timely reminders for lease payments. We provide services to a wide range of sectors including banks, pharmacies, supermarkets, and hypermarkets.
All under one roof
Struggling to manage multiple outlets? Running out of time to maintain documents? Then Lease Portfolio 365 is the best place for you. Lease Portfolio 365 helps you in managing the multiple branches of a company and maintaining their legal documents and notifying you whenever there is a need to pay a lease or extend an agreement and so on. As Lease Portfolio 365 reduces a major load on your shoulders you can concentrate more on developing business strategies, fundraising, and further development plans that are required for the future growth of your company.