If you’re interested in putting up a business inside a mall, the first thing that the mall administration will ask from you is to submit a business Letter of Intent (LOI).
A Letter of Intent is not a document we often see. That’s why most entrepreneurs don’t know what to write inside it.
Some might also ask, how should it be written? Or, is there a correct template or layout for making a Business Letter of Intent?
What is a Letter of Intent?
Before I give you the answer to these questions, let me first share with you what a Letter of Intent is according to Wikipedia. They have the simplest definition that I found online.
“A Letter of Intent or LOI is a document outlining an agreement between two or more parties before the agreement is finalized.
The concept is similar to the so-called heads of agreement. Such agreements may be Asset Purchase Agreements, Share Purchase Agreements, Joint-Venture Agreements, and overall all Agreements which aim at closing a financially large deal.”
That really sounds so formal, don’t you think? However, there’s really no reason for you to be afraid of getting your LOI wrong.
Although it does usually resemble a contract, it is most of the time, non-binding. This letter is often just issued to initiate a formal business transaction.
What’s inside a Letter of Intent?
For renting or leasing a space inside a mall or other commercial space, a Letter of Intent would contain the following information:
- A statement saying your intent to lease a space inside the mall.
- A description of your business including it’s basic concept, the business model it follows and a brief background and history.
- A list of your products and services which should include pricing, merchandise packaging design and a description of your target market.
- Your space, utilities and manpower requirements including the types of equipment you’ll be using and the number of employees you’ll have.
- If there’s any, it would also be good to show pictures of your other branches or stores.
- Your contact details and the best schedule for you to have a meeting
Before writing your Letter of Intent, it might help if you can ask the administration if they have an LOI template that you can just follow.
They could also provide samples that was submitted to them by past lessees. If not, do ask them what specific details they need stated in your LOI.
Sample Letter of Intent Template
To help you with writing your Letter of Intent, here’s a very simple LOI template which you can use if you’re planning to rent or lease a space in a mall for your business.
Ms. Maria dela Cruz
Dear Ms. dela Cruz,
XYZ Foods would like to present this Letter of Intent to signify our interest in leasing a commercial space inside ABC Mall.
We are the business behind the food cart, W Burgers, which has been selling gourmet hamburgers since 2004. Our products include a variety of hamburger sandwiches and burger rice meals. We also sell ice cold beverages.
Currently, our burger sandwiches and rice meals sell for P80 each. Our clients are usually young professionals who order our food as packed meals for lunch or dinner.
The W Burger food cart that we plan to put up would require at least 6 square meters and a power outlet for a cash register, a small freezer, a rice cooker, a soda vendo machine and a gas operated frying griddle.
The food cart would be manned by two employees.
We already have 5 branches located in various commercial areas in the city but this is our first venture in putting up a branch inside a mall. Attached are the photos of our existing branches.
We believe that our food cart complements the business concept of ABC Mall because we cater to the same target market.
Thus, we would appreciate it if you could contact us at 555-0921 during office hours from Mondays to Thursdays, so we can set up a meeting to discuss this further and possibly come up with a formal business agreement.
Thank you very much.
Mr. Pedro Reyes
XYZ Foods – W Burgers
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