Danner's to Be Slimmed Down to Make Way for Subway

After several months of failed negotiations with her landlord to lower her store's rent -- and a near eviction -- Susan Danner, owner of Danner's Books in Muncie, Indiana, announced that the store would be reduced in size from 6,000 to around 4,000 square feet to make way for a Subway restaurant franchise, which is expected to move into the space in the next few months.

Danner told BTW that the decision to give up space was her landlord's, not hers, but she plans to make the best of the situation. "I'm to the point where I've given in and [have] come to the realization that [the landlord] is not going to negotiate [a lower rent] with us," Danner said. "His mind is made up, and we might as well face the music and deal with it."

After suffering a poor first quarter due to an ailing economy in Muncie, and faced with the realization that she would not be able to pay her rent on time, in March, Danner approached the landlord's property manager in the hopes of renegotiating the store's lease. "The property manager called us and said … [the landlord] can't do anything [in terms of rent price] … but he can reduce [the store's] space," she explained. "We came back and said we really don't want to" but the property owner would not discuss lowering the price per square foot.

Danner was persistent, but, over the next few months, the negotiations between Danner's and the landlord became fairly contentious. At one point, the store, which has been in Muncie since 1975, and in its present location since April 2001, was threatened with eviction for being in default of its lease. With the help of her attorney, however, Danner avoided eviction, but the store's fate was sealed when the property owner rented approximately 2,000 square feet of the bookstore to the Subway franchise, Danner reported.

Overall, the entire process has proved costly for the bookstore, said Danner. As per her lease, which runs through 2011, the store owes five percent in late fees for May, June, July, as well as interest; fees for both her and her landlord's attorneys; and, of course, rent. She noted that moving is not an option, because she would still be responsible for rent until the property owner finds a tenant -- even then, Danner's would be responsible for any difference in rent, if it were leased to a business at a lower price than the current $15 per square foot. "Everything [the landlord] is doing is legal," she said. "My advice to bookstores is to read your lease carefully [before signing]."

Danner said she has not yet been told when the landlord will start renovations in her store, or the exact amount of space the Subway will be allotted. Fortunately, the Subway representatives have proven to be "very nice," she said. "They asked what kind of things could we do [to help each other's business]…. [With a fitness center on one side of the store and a Subway on the other], we'll see if we can do joint promotions on fitness." Moreover, the extra traffic for Subway "may end up benefiting us in the long run." -- David Grogan