National Facilities Group Serves Starbucks

Taming the Lease Monster... Let's say that you operate 4,000 shops around the world and open a new business location every seven business hours. How do you manage all those leases? Well, if you're Starbucks, you integrate National Facilities Group's SLIM (Strategic Lease Information Management) program with Oracle Financial. That's what Rick Zelinsky, Director of Client Services for National Facilities Group, told me when I met with him recently in Chicago.

SLIM is a lease administration program designed for companies with over 100 locations. (Starbucks has 52 locations alone in downtown Chicago.) It is not a lease transaction management system. Instead it's totally focused on what happens after the lease is signed. So it handles rent payments, expense pass-throughs, lease expirations and dozens of other variables. In fact, according to Zelinsky, SLIM includes over 2,000 fields of information.

Each month Starbucks processes over 35,000 lines of payments. Amazing. That's because, in addition, to basic rent payments to a landlord, there are items like rent escalations, utilities, taxes, etc. Each lease administrator handles between 250 and 400 leases. How can you possibly monitor so many payments? The answer, according to Zelinsky, is to manage by exception. So what pops out to the administrator are all items which vary more than a specified percent from the previous month. Wow, how did we manage leases before software programs?

--Peter Pike