How to Find a Restaurant Space to Rent
Finding a great location for a new restaurant presents many challenges. Is it the right size? Is there enough traffic? Can you afford it? What is the landlord like? Does the location have a history of failed restaurants?
Here are tips to help you find just the right place for your new restaurant.
Do Your Restaurant Market Research
Before you even start looking at any type of restaurant space to rent, first do your homework: is it the best area to open a new restaurant? Understanding who your potential customers are and where they live will help you to tailor your restaurant concept accordingly. Performing market research for a new restaurant, because it can tell you the income range of a potential restaurant location. Will there be enough people, with enough expendable income, to spend money at your new restaurant? If the answer is no, then move on to another location.
Be Flexible When Looking at Restaurant Spaces
Restaurant spaces come in all shapes and sizes, from teeny little hole-in-the-walls to big sprawling cafeterias. You probably already have a good idea of the type of restaurant you want to open, and what it will look like inside. However, the perfect space may not, at first glance, be what you envisioned. So be willing to redesign the restaurant in your head to fit a great space. Remember, more often than not great restaurants don't make a location, a location makes great restaurants.
Do a Landlord/Location Background Check
Once you've selected a restaurant space, find out as much as you can about your potential new landlord. If there are other businesses in the same location, ask other business owners if the landlord is easy to work with and if he addresses problems quickly. You can also ask about pros and cons of the location, as well as their thoughts on a new restaurant going into the building. Of course, take everything other tenants say with a grain of salt. If they think a restaurant is a fantastic idea, remember, it’s their opinion, not an actual fact.
Know Your Budget
You may find the perfect place to open a new restaurant, but if the rent is out of your budget, don't get too attached. Just like you wouldn't rent an apartment you couldn't afford, the same is true of renting a restaurant space. The early years of a new restaurant are generally pretty tight, financially (though come to think of it, so are the later years) so over-extending your budget before you are even open isn't a good idea. But do in keep in mind that restaurant rent can be negotiable, which leads us to...
Don't Be Afraid to Haggle
Chances are your prospective landlord doesn't want his or her prime real estate vacant for long and may be willing to haggle at the cost of rent. Common rent negotiations for a new restaurant include not paying rent at all until the restaurant opens for business, pro-rating rent. You may pay a very low rent the first year of the lease, then gradually increase it each year thereafter.
Know What's Included With Rent
Is heat, water, electricity included in rent (I highly doubt it- but a girl can dream, right?). What about trash removal, building repairs, and general maintenance. Your restaurant lease should detail exactly what expenses your landlord will cover, including any required renovations, and what expenses your restaurant (that means you) will be responsible for paying.
Have an Exit Plan
How long is your restaurant lease for? Two years? (good) Five years? (hmmm) Ten years? (run away). No one wants to think about their restaurant closing, at least not before they are even open, but the reality is, a majority of new restaurants close within the first couple of years. So, if for nothing else but for peace of mind, keep your lease as short as possible. If things are going along swimmingly after year two or three, then sign on for a longer lease.