Maureen,

One of the issues you will need to address is whether your shop will be run
by a for-profit or non-profit entity.  There will be tax implications If you
choose to have a for-profit organization run your shop.  This doesn't mean
this is a bad thing, but you will want to talk with a lawyer or accountant
and run the numbers before you make the final decision.  For instance, a
for-profit organization may bring bigger marketing dollars to the project,
they may have a more cost effective staffing structure, and they may be able
to gross more, but your percentage return might be less than with a
non-profit because of the tax you must pay.

When I was at Columbus Center we structured a deal with a small for-profit
merchant to run our shop.  The deal was structured such that he would pay a
base rent and a percentage of his gross revenue to the Center.  The Center,
as a non-profit, had to pay tax on the rent and on that percentage of his
gross that was not directly attributable to educational material sales.
Since he was a small scale merchant he was looking to the Center for the
marketing dollars.  all in all I think we spent more on bookkeeping than
anything else.  It was a great little shop, but I'm not convinced it was a
good business deal.

You might talk with your local mall owners to find out about how they
structure their deals since that is really what you are doing when you
outsource a shop.

Warm regards,

Carol Bossert
CB Services
3900 Shallow Brook Lane
Olney, MD  20832
301-260-0250
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