Advice for Buying a Restaurant and Selling a Restaurant

University Restaurant Space for Lease in Atlanta

Posted by Eric Gagnon on Sep 2, 2014 1:32:26 PM

4277_mainpic-1Rent this restaurant space for lease in a location surrounded by thousands of potential customers.  Located in downtown Atlanta, this restaurant space for lease, offered by the restaurant brokers, is the perfect new locale for your business.  The monthly rent is $4,995 for 2,900 square feet which includes a 600 square foot mezzanine open to the downstairs.  Public transportation provided by the Metro Atlanta Rapid Transit Authority (MARTA) offers plenty of transportation options.  Patrons can easily access the district by either the MARTA rail stations and/or the city bus routes.


This is currently a closed location however it has a hood, grease trap, flat top, fryers, refrigeration and some other remaining equipment.  The front of house includes everything down to the chairs and  tables so it could be turned over to a new concept quickly.  Your new business will be located directly on a university campus with access to more than 32,000 students and 3500 faculty members.   Landlord is willing to do both Tenant Improvement Money and free rent for a period of time for the right tenant to offset an upfront charge of $25,000.  The landlord is willing to make a sweet deal but he wants experienced operators or franchises for this one of a kind location.  His preference for the concept includes a breakfast and lunch operation.  Come a break a few eggs on this college campus today with the many concepts that are right for this daypart.    
 
The area is thriving and allows for a terrific opportunity.  This restaurant space for lease is surrounded by major retailers, high-end businesses, and outstanding foot traffic.  This area is the central business sector for Atlanta and is the largest of the city’s districts.  This Atlanta neighborhood hubs many corporate headquarters as well as city, county, state, and federal offices. 
 
This restaurant space for lease is within a region which measures approximately four square miles and has the median income of $87,000.  Due to the exponential growth of the district, the downtown area has undergone a significant transformation.  Renovation of historic buildings and construction of new housing/condos has welcomed the arrival of new businesses and residents alike.
 
This restaurant space for lease allows for endless inspiration and numerous concepts.  A spacious 2,900 square foot floor plan, the site can effortlessly mold to concepts such as a coffee shop, doughnut, fast food franchise, or even a yogurt shop.  Your options are limitless.  Quick-casual concepts have become extremely popular and allow the customers convenience and speed of service.  The rise of the “foodies” has also permitted significant growth for fine dining joined with casual dining prices.
 
Make an offer today on this restaurant space for lease and contact Certified Restaurant Broker Eric Gagnon at 404-800-6000.

Topics: leasing a restaurant

Restaurant Brokers Talk Going From Restaurant to Retail

Posted by Media WSR on Jul 21, 2014 2:54:00 PM

 

July 26th, 2014 – The Restaurant Brokers, Eric and Robin Gagnon, are talking to restauranteurs who took their product out of the store and onto the grocery store shelf!  They are joined on their weekly radio show by the CEO and president of Atlanta Bread Company, CEO of The Chef Shelf, and CEO and chef of Davio’s Nothern Italian Steakhouse/Davio’s Frozen Food.

This week Eric and Robin are talking to panelists who know all about taking a business from “Restaurant to Retail.”  Have you got that secret sauce everyone’s raving about and you’re looking to take it to supermarket shelves across the nation? Well, tune in this Saturday, July 26th, 2014 on AM TALK920. These panelists have figured out how to successfully monetize their product through alternate distribution channels.  They are sharing their tips for success with listeners. 

 Don’t miss it because these CEOs aren’t holding back! They all agree that while success may not happen quickly, there is, according to at least one of these experts there is “great demand for brands to be in supermarkets.”  They all agree it can be harder than you think to move your restaurant offerings onto restaurant shelves since as one guest puts it, “You don’t go to Costco overnight.” 

 What are some of the challenges? Steve DiFillipo of Davio’s distributes his frozen food brand in more than 3,000 outlets nationwide and says, “Don’t think you’ll get restaurant markups!”  Other advice from this panel, “When going from restaurant to retail your brand has to be consistent with the supermarket’s brand and you have to be realistic.  Lastly, pick and choose your items to put forward at retail.  As these experts tell us, “Don’t think you can do everything on your menu.”

 Atlanta Bread President Jerry Couvaras has developed a 140,000 square foot bakery facility that turns out 52,000 muffins an hour on just one line.  He is adamant that quality control can set you apart saying, “Quality, quality, quality (is) the point of difference” He adds that the bakery distribution side of the business is a benefit for his franchisees.  It allows his total brand to benefit from a large Research and Development chef team, ultimately helping both the retail store (franchise units) as well as sales in outside retailers.  

 Chef Shelf owner Tanner Agar says you can and should start small saying, “It can be lucrative and a lot of fun…It’s so important the product represents them.” 

 Tune in to get more details and advice like what trust has to do with going into retail and the real key to branding a product. How long should it take to start seeing your product in stores? Who should you be selling to? Is retail right for you and your brand? Join us Saturday and find out the answer to these questions and more!

This Week’s Guests:

jerrycouvaras

CEO and president of Atlanta Bread Company Jerry Couvaras:

Jerry is a strategist, a visionary, and a leader.  His early career success in South Africa saw him thrive in investment banking, where he gained invaluable internal exposure in a wealth of industries. This afforded him limitless opportunities once here in the US. Upon making Atlanta his home some twenty years ago, he saw a sandwich chain as a smart early investment not for what it was, but for what it could be, and he soon capitalized on the company’s expansion potential to set new standards in the market. Recognition for such initiatives came rapidly. In 2003, he was a finalist for Ernst & Young’s Southeast Businessman of the Year. Today, Bake One and Atlanta Bread develop and supply new product innovation for some of the largest global customers based here in the US, while exporting to fifteen countries worldwide. Jerry continues to stand as a model of success. He’s been a guest speaker at recognized establishments and featured in high-profile business publications, including Donald Trump’s The Way to The Top.

 He graciously serves as a Trustee of Woodruff Arts Center, and sits on the Boards of Directors with The Hirsch Academy, FOCUS (Families of Children Under Stress), and Concorde Fire Soccer Club.

home steve

 

 Chef and CEO of Davio’s Northern Italian Steakhouse/Davio’s Frozen Food Steve DiFillipo:

Steve is a chef, owner, restauranteur and author. His Davio’s brand is in Atlanta, Boston, Philadelphia, and Foxborough, Maine. This consummate restauranteur and Culinary School graduate has also taken his brand outside these location and into more than 3,000stores including Cosco, Big Y and BJ’S. The Davio’s Frozen Food line of popular Spring Rolls-Philly Cheesesteak Buffalo Chicken, Shrimp Cojita and Chicken Parm are in the coolers at stores in more than 40 states across the U.S.

Steve is a graduate of Boston University and the Cambridge School of Culinary Arts. He is very involved in the community, serving on several non-proft boards. It all started at the age of 24, Steve purchased an established restaurant called Davio’s in Boston’s Back Bay. That was his first in a succession of popular restaurants changing the concept to a Northern Italian Steakhouse.

In 2008 he was inducted into the Massachusetts Restaurant Hall of Fame and in 2014 was awarded Restauranteur of the Year. He is also the author of “It’s All About the Guest: Exceeding Expectations in Business and in Life, the Davio’s Way.”

Tanner Agar(1)

CEO of The Chef Shelf Tanner Agar:

Tanner Agar worked as a chef and server in fine dining in Canada, the US, and Spain. While a student at TCU he started The Chef Shelf to help chefs and restaurants package their award winning recipes and connect customers to the flavors they love through products, videos, and recipes. Tanner also hosts a 15 second cooking show on Instagram.

 About We Sell Restaurants

We Sell Restaurants is the nation’s largest restaurant brokerage firm specializing in restaurants wanted (restaurants for sale), leasing a restaurant and franchise restaurant resales.  The We Sell Restaurants brand is known nationwide for professionalism, industry knowledge and unmatched service. They can be found online at www.wesellrestaurants.com.  The firm is franchising their brand nationwide and has offices in Florida, Georgia, Colorado, Tennessee and South Carolina.

Topics: buying a restaurant, restaurant brokers, selling a restaurant, leasing a restaurant, restaurant for sale

Restaurant Brokers talk Asian cuisine concepts

Posted by Media WSR on Jul 14, 2014 3:01:00 PM

July 19th, 2014 – The Restaurant Brokers, Eric and Robin Gagnon, are joined on their weekly radio show by Yuen L.Yung of How Do You Roll?, Randy Murphy of Mama Fu’s and Patty Sriskiew of Natalee Thai.

This week Eric and Robin are focusing on Asian Cuisine! They are interviewing restaurant operators who are serving flavors showing Americans have moved beyond the basic “wok and roll.” The 2014 Culinary Forecast from Nation's Restaurant News shows Southeast Asian cuisine is gaining popularity along with out of the bento box thinking like Asian inspired breakfast items.  You’ll hear from these operators on what is making their concept fresh, different and appealing to consumers. Guest range from Shark Tank winner How Do You Roll? to Mama Fu’s, an Asian brand on the comeback trail.   

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What happens when you get a million dollar injection into your business? The restaurant brokers asked How Do You Roll co-founder Yuen Yung this question.  He appeared on ABC’s Shark Tank and left with a cool one million dollars to grow his brand.  According to Yuen, “What you see on TV in eight minutes” is just a portion of the more than 90 minute grilling from the Sharks.   In the case of How Do You Roll, one shark stepped up to put more money in their restaurant chain than any other concept had previously been awarded on the show.

According to the guests working to expand their brand (Mama Fu’s and How Do You Roll?), one challenge facing today’s franchise operator is finding real estate.  The restaurant brokers agree that yes, “everyone is looking for real estate between 1500 and 2000 square feet.”  One response when space is expensive, do less with more.  Mama Fu’s President and CEORandy Murphy says his franchise Asian restaurant chain has figured out how to significantly reduce their square footage and double profits.  

Listen to this week’s show as the restaurant brokers take on Asian Cuisine and all elements ranging from the main ingredients to the customer profile.  Is it possible to build a process around a cuisine as old as history itself?  Yes, says Yuen Yung of How Do You Roll, “To be a sushi chef takes time and training, we’ve found ways to systemize it.”

This Week’s Guests:


Co-Founder of How Do You Roll? Yuen L. Young:

Yuen Retake

 

Yuen L. Yung co-founded the fast-casual sushi dining franchise in 2008 with his brother Peter Yung. Yung’s entrepreneurial spirit has always been evident and after years of being a successful financial advisor, he launched a franchise practice with two partners… but Yung was no stranger to the restaurant industry. As a child he ran the cash register at his parents’ restaurant where he gained valuable experience.

           

Being the first of its kind, How Do You Roll? leads the sushi revolution by offering unique ingredients such as soy wraps, grilled chicken and beef, and seasonal fruits such as strawberries. Those intimidated by raw fish as well as sushi aficionados can find exactly what they want. The fast casual sushi concept appeared on Shark Tank and attracted a million dollar investment from one of the sharks.

 

Yuen sees How Do You Roll? as an opportunity to leave an impression on the world, by making sushi more accessible and creating world peace through cultural fusion. He declared "making the world better, one stomach at a time" as How Do You Roll’s mission.

 

Randy Murphy of Mama Fu’s:

Randy Murphy

Mr. Murphy began his professional career in High Tech software development and sales as a consultant for PricewaterhouseCoopers, Tivoli Systems and Digital Motorworks.  He also helped to create and build the Business Process Management software company, Lombardi Software that recently sold to IBM.  During this tenure in High Tech, Mr. Murphy also owned and operated a software development and consulting business, Murphy Consulting.  He has a B.A. degree in Economics from The University of Texas, Austin.

After nearly 13 years in High Tech, Mr. Murphy began his transition over to the restaurant business and now has over a decade of restaurant operations and franchise experience.  He has held operational roles at various quick service, fast casual and full service brands, and has held nearly every position from bussing tables to Area Director, and at one point Mama Fus largest franchisee.

Mr. Murphy made the leap from franchisee to franchisor when he and partners acquired the Mama Fu’s Asian House brand in 2008 from Raving Brands out of Atlanta, GA.  Since moving the headquarters to Austin, TX and improving and redefining the brand through 9 corporate owned and operated stores, Mama Fu’s is now actively growing its franchise base once again with 19 total stores operating and nearly 70 units in various stages of development.

Mr. Murphy has brought core operational changes to Mama Fu’s such in-house delivery, Flex Casual dining service (fast casual lunch, full service dinner), and full adoption of technology in all areas of the business from site selection, marketing, mobile apps, consumer ordering and loyalty, social media and staff management.  Since acquiring the brand, unit level revenues have increased by 20 percent while startup costs have decreased by 25 percent, and in 2012 Mama Fu’s was recognized as 13 on the Fastcasual.com Top 100 Movers and Shakers, and was awarded the prestigious NRN Menu Masters, Menu Trendsetter award.   Mama Fu’s focuses on franchising with experienced, multiunit operators and has franchise partners in the system that also currently or have operated brands such as Buffalo Wild Wings, Melting Pot, Wendys, Chilis, McAlisters Deli, Sonic, Egg and I, SmashBurger, and Little Caesars.

Mr. Murphy co founded Murphy Adams Restaurant Group, Inc. with Mark Adams, and is President and CEO of the company and the Mama Fu’s franchise system.  Mama Fu’s is a recognized contributor to many local schools, churches and youth organizations in the Central Texas area through its 9 year old, CORE fundraising program. Mr. Murphy and his wife Rebecca live in Austin, TX with their two children, Charlie and William.  Mr. Murphy spends spare time as a Little League coach and active member of Young Presidents Organization, and enjoys travelling with family, following Longhorn sports, and mountain biking.

 

Patty Sriskiew of Natalee Thai:

 Patty   NAT THAI Headshot

Patty Sriskiew of Natalee Thai Cuisine has had a feature segment on KCAL9 of Los Angeles, California and Natalee Thai has won many awards including the 2013 Argonaut Award for Best Thai in the Best of The Westside awards. Natalee Thai was also awarded the Thai Select Premium Award by Thailand Ministry of Commerce.  

This Thai restaurant offers traditional Thai dishes, a pleasant dining atmosphere, and friendly staff. The recipes are prepared with the freshest ingredients and they make use of the fresh local products whenever possible. Also adhering to Asian cultural tradition, all of Natalee Thai’s meals are served "Family Style."

About We Sell Restaurants

We Sell Restaurants is the nation’s largest restaurant brokerage firm specializing in restaurants wanted (restaurants for sale), leasing a restaurant and franchise restaurant resales.  The We Sell Restaurants brand is known nationwide for professionalism, industry knowledge and unmatched service. They can be found online at www.wesellrestaurants.com.  The firm is franchising their brand nationwide and has offices in Florida, Georgia, Colorado, Tennessee and South Carolina. 

Topics: buying a restaurant, restaurant brokers, selling a restaurant, leasing a restaurant, restaurant for sale

Restaurant Brokers talk Restaurant Training on Weekly Radio Show

Posted by Admin WSR on Jul 7, 2014 12:13:00 PM

July 12, 2014 – The Restaurant Brokers, Eric and Robin Gagnon, are joined on their weekly radio show by Joe Kelly of Talent Served, Kim Zimmerman of Kim Zim Hospitality and Misty Young of Squeeze In Truckee.

Joe Kelly, Robin, Kim Zim, Ashley,EricThis week Eric and Robin are questioning a panel filled with successful people about Restaurant Training. Restaurant training can be one of the last things new owners look into, if they look into it at all, but it should be one of the first! Join us as our panel tackles the hard questions and the Restaurant Brokers help you get ready to run the most rewarding operation you can, the right way!       From right: Joe Kelly, Robin, Kim Zim, Ashley, Eric

                                                       

How do restaurants train their staff to deliver greatness? How do the best restaurant companies get everyone on the same page when it comes to service? Has training become more affordable for restaurants over the years? Does an investment in training lead to lower turnover and happier employees? How much restaurant training has shifted to video or online training? What does the training of the future look like? Well, Kim Zim can tell you this, it’s not what it used to be.

 

“You can’t use grandma’s training tools, they don’t work anymore!” Kim Zim of Kim Zim hospitality said.

Tune in Saturday, July 12, 2014, on Talk920 for answers to all these questions and more gems from Kim Zim and our panel of experts!

This Week’s Guests:

Joe Kelly professional recruiter of TalentServed:

His firm is made up of hospitality industry veterans with broad experience in operations and corporate human resources with many of the industry's top companies. He helps restaurateurs and understands the real world challenges that hospitality professionals face in their day-to-day work life.  He also grasps what companies are looking for in their future leaders.

Misty Young chairman of Squeeze In Franchising:

Her firm helps others become owners of a high quality, well known, systematically designed and developed restaurant opportunities. She is co-owner of Squeeze In, a four location restaurant collection based in Reno and Tahoe with a fifth location opening in Northern California in the fall of 2014.

She's a certified member of the John Maxwell Team, and as a Coach, Speaker and Trainer she serves independent restaurant owners and other small business owners, to help achieve business and personal success.

The Author of From Rags to Restaurants: The Secret Recipe to Restaurant Success, describes herself as a high energy restaurant owner, expert with confidence, diligence and tenacity.

Misty grew up in a family restaurant where she was introduced to the business. 

Kim “Kim Zim” Zimmerman Florence of Kim Zim Hospitality LLC:

She has more than 20 years’ experience delivering award-winning training, operations, leadership development, human resources and branding successes for some of the biggest names in the restaurant and hospitality industry.

During her five years with InterContinental Hotels Group as the Brand Service Culture champion Kim helped Hotel Indigo grow from 7 to more than 34 domestic and international properties.

Prior to that she served as Director of Training for Ted’s Montana Grill, a national restaurant chain founded by Ted Turner. Kim also worked with DiscoverLink to develop an e-learning training program specializing in skill training, acculturation, and compliance training for the hospitality industry.

She is one of only 43 individuals to be certified as a Continuous Improvement Leader, and the only individual to be certified as an instructor, by Atlanta-based The Leadership Institute.

Florence has spoken at numerous professional conferences, including the National Restaurant Association. She most recently spoke at the 2011 national conference for the Council of Hotel and Restaurant Trainers (CHART).

About WeSellRestaurants

We Sell Restaurants is the nation’s largest restaurant brokerage firm specializing in restaurants wanted (restaurants for sale), leasing a restaurant and franchise restaurant resales.  The We Sell Restaurants brand is known nationwide for professionalism, industry knowledge and unmatched service. They can be found online at www.wesellrestaurants.com.  The firm is franchising their brand nationwide and has offices in Florida, Georgia, Colorado, Tennessee and South Carolina. 

 

Topics: buying a restaurant, restaurant brokers, selling a restaurant, leasing a restaurant, restaurant for sale

We Sell Restaurants Represents 101 Concepts in Latest Transaction

Posted by Robin Gagnon on Jul 16, 2013 11:14:00 AM

101 Concepts AtlantaWe Sell Restaurants announces the representation of 101 Concepts in their latest restaurant concept.  The group’s newest restaurant location will be in the Historic Arts Neighborhood of Castleberry Hill at 309 Nelson Street in Atlanta
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101 Concepts is an Atlanta-based entrepreneurial restaurant group which includes the new south cuisine served at Food 101 under the direction of chef Justin Keith, the authentic eatery taste offered by the full menu of classic Irish dishes elevated to the gourmet level at Meehan’s Public House in Sandy Springs, Vinings and Atlantic Station and modern Italian fare offered at Cibo e Beve.    

The new 101 Concepts restaurant is called “Smoke Ring” with a focus on barbeque cuisine according to the partners.  The concept will anchor a major retail presence within Castleberry Point in downtown Atlanta occupying some 4,100 square feet. Chris Segal of 101 Concepts says, “We are very excited about the opportunity and growth potential for this newest concept.  The new stadium and other projects underway downtown make this an excellent time for us to develop within the area.”  Chef Jordan Wakefield and his wife Erin are the Chef Partners on the new 101 Concepts project, The Smoke Ring.

Robin Gagnon of We Sell Restaurants represented 101 Concepts in the transaction and had this to say, "101 Concepts is a leader in the development of entrepreneurial restaurant concepts.  They are an ideal fit for the community as we grow the culinary arts experience to compliment the galleries, shops and restaurants in this Landmark Historic District.”  Brittany McCall represented Vantage Realty Partners. 

The partners at Smoke Ring have a full design team in place and are planning a quick turnaround on the new space with goal of opening by Labor Day. 

We Sell Restaurants is headquartered in Atlanta Georgia and is franchising nationwide with offices in Tennessee, Florida, South Carolina and Colorado.

Topics: restaurant brokers, leasing a restaurant

Leasing a Restaurant is Harder Than You Think

Posted by Robin Gagnon on May 11, 2013 7:48:00 AM

leasing a restaurantIt seems simple enough.  You drive down the road and like the childhood game of “I Spy,” played with your sisters and brothers in the car, you spot the vacant restaurant for rent in the shopping center.  It’s the perfect location.  It seems like the right size.  There isn’t another pizza place in the shopping center (your concept).  Lastly, it’s close to your house.  Immediately, you whip out your cell phone, make a call and get connected to the leasing agent. STOP.  You just made your first mistake in leasing a restaurant. Here’s why.

The leasing agent who took your call works for the landlord.  He is under contract for the landlord.  That means he or she has no interest in protecting your concern in the transaction.  His loyalty is to the person paying his bill and that isn’t you. 

Here’s what the Landlord’s Representative will tell you.    

  • Base rent level
  • CAMS
  • Size of Space

Here’s what he won’t tell you

Why the last guy left

If the last tenant was a pizza place that defaulted on the lease because the guy one shopping center over has a lock on the business for a three mile radius, he’s under no obligation to tell you this.

If he’s Overpriced

If the average rents in this area are $15.00 per square foot and they are charging 20% more because the landlord “wants” that number, he’s under no compunction to share that information.

If the Infrastructure is Sufficient for a Restaurant

If the HVAC unit is 2 tons for 1400 square feet (undersized for a restaurant) and the last restaurant shut down because the patrons couldn’t take the heat, he won’t feel the need to disclose this.  Likewise, if the electrical panel is a basic 200 amp one that shut down every Saturday night as soon as they brought on the extra pizza oven to handle the traffic, he probably won’t feel the need to reveal that information if you don’t ask.     

If Competing Properties are Available

If the restaurant space in the next shopping center (owned by a different landlord) in a better location is available for less rent, he will feel no requirement to share that since he doesn’t represent that shopping center.

Is it becoming apparent why you should STOP before calling the number on that sign?  Want to know what to do instead?   

Contact a restaurant broker to represent your interest in the transaction.  There is no additional cost to you for this effort (at least not from We Sell Restaurants).  When our restaurant brokers represent your interest they will:

1)      Give you an overview of other operators in the area and any information available on how they are doing

2)      Review comparable and/or nearby centers for lease rates and availability (even if listings aren’t publicly known).

3)      Ask the landlord to provide HVAC, Electric, Grease Trap and Hood information/capacities so you can verify with your contractor, electrician or architect whether they will handle your equipment and/or cooling needs.

Here’s what the Landlord’s Representative wants from you

  • Personal Financial Statement
  • Menu
  • Business Plan
  • Lease Application
  • Maximum Rent
  • Maximum Personal Guarantees

The Restaurant Broker will have the forms, documents and templates to prepare you for submission to the landlord including personal financial statement forms, business plan templates and applications.  He will review the data before it is submitted so it puts you in the strongest negotiating position.

Here’s what the Restaurant Broker will negotiate to get FOR you

  • Best Base Rent Rate
  • Best CAMS deal including locks, fixed levels or maximum increases
  • Minimal Personal guarantees
  • Exclusivity for your concept
  • Vacancy clauses

It seems pretty apparent to the restaurant brokers that leasing a restaurant is a little tougher than simply the childhood game of “I Spy” and a phone call.  Do you agree?

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Topics: leasing a restaurant

How to be SMART About Leasing a Restaurant

Posted by Robin Gagnon on Apr 22, 2013 11:13:00 AM

leasing a restaurantAs restaurant brokers helping with site location for restaurants, we’ve seen every mistake in the book.  There is a however, a SMART way to lease a restaurant

Do you remember the age old requirements for goals taught in every business class, performance review seminar and all self-help books?  It’s easy to remember since goals should be S.M.A.R.T. where S is Specific, M is Measurable, A is Attainable, R is Relevant, and T is Time Bound.  The restaurant brokers recommend you apply this to your goal of leasing a restaurant. 

S is Specific

If you are vague and totally unlimited in where you want to be, expect to get results consistent with this goal. As a restaurant broker, I routinely get calls from people saying, “It doesn’t really matter where the restaurant space goes, just find me a location.”  That is absurd.  You must be Specific as it DOES matter where you lease a restaurant.  The demographics matter.  The traffic flow matters.  The surrounding business community matters.  It ALL matters and it’s all relative to the future success or failure of your restaurant.

M is Measurable

Secondly, you must have Measurable requirements.  What’s measurable when leasing a restaurant?  How about rent?  Someone who calls a restaurant broker and says, “Find me a space and as long as it’s a good one, it doesn’t matter what the rent is” will not be taken seriously and why should they?   Your rent should be a function of your sales.  If you’re doing a breakfast and lunch business that only operates Monday through Friday, there’s only so much volume you can do in a given space so yes, there is a number of rent that is too high no matter what.  Another measurable component is space.  It DOES matter how large your space is.  If you’re doing a sports bar, it can’t be handled in 1600 square feet.  By the same token, a delivery and carry out location shouldn't be 4,000 square feet (usually).  Be prepared to give your restaurant broker measureable requirements for square footage, lease amount, traffic count, lease term and every other element critical to your business. If not, neither one of you will be productive in your search.

A is Attainable

Leasing a restaurant requires that your goal be Attainable.  Asking for Buckhead lease space in Atlanta or beachfront property in Fort Lauderdale at $15.00 a square foot isn’t going to happen no matter how much you want it.  The same thing is true of someone who says, “I just want to be in all the A+ shopping centers nearby Chipotle as a start-up” (this space is going to established multi-unit or franchisees).  Do your research so that your requirements can be attained or you’re setting yourself up to fail in leasing a restaurant.

R is Relevant

Your search for leasing a restaurant should also contain Relevant criteria that you share with the restaurant broker.  What’s relevant?  How about your concept?  We have had people approach us to do a search for them that don’t want to reveal their concept, menu or financials.  That’s RELEVANT to the search and highly relevant to a landlord.  In many cases, landlords aren’t even willing to show space until they see preliminary concept information and a menu.  Why?  Some centers clauses that restrict other operators.  For example, a Publix anchored shopping center probably excludes leasing to any other bakeries.  Even if there are no exclusions, a landlord doesn’t want two pizza restaurants in the same center.  You have to be willing to share relevant information about you as a tenant (meaning menu, concept, background and financial information) if you are going to avoid mistakes in leasing a restaurant.

T is Time Bound

Lastly, your search should be Time bound.  Let your restaurant broker know when you are planning to open.  Looking for a restaurant for rent today when you don’t have your money together yet and aren’t sure when you can be open is just a waste of time.  A deadline of opening in 30 days when you are just starting a search is alo unrealistic.  Begin about six months in advance of your opening and make sure you’re ready for your search before you start drawing on resources.

That’s it.  Avoid stupid mistakes by being S.M.A.R.T. about leasing a restaurant.  You’ll get a lot more respect in your search and better results as well.

Like this arrestaurants for saleticle?  SHARE it please on Facebook, Linked In or Twitter. 

 

Topics: restaurant brokers, leasing a restaurant

Renting a Vacant Restaurant Space? It Might Cost More than You Think

Posted by Robin Gagnon on Apr 8, 2013 11:08:00 AM

restaurant for saleThe restaurant brokers often have buyers approach us on vacant restaurant space.  The price is listed at $0 so it seems like it’s pretty cheap to get into business, right?  But before you go down the path of renting a vacant restaurant space to save money, consider all the real costs involved.

Renting a vacant restaurant usually means there’s some basic infrastructure in place.  Often, the business will have the hood and grease trap or even walk-in refrigeration.  After all, the last guy in business there couldn’t really take those items with them when he left.  That means you are left to put the rest of the equipment in place when renting a vacant restaurant.  Let’s consider the costs.

A typical equipment line will consist of a flat top, multi-burner stove, fryers, convection oven and then any other specialized equipment for your concept (a wok or pizza oven for example).  That’s for the “hot” side of things.  In addition, you will need refrigeration and prep station space to put the food together and move it from preparation to cooking.  In all, most kitchens will have a minimum of 8 – 10 feet of equipment under the hood and another 8 – 10 feet of equipment in the prep area.  That’s on top of the equipment you need in the dish bay or dishwashing station area, the sinks required by code or any other refrigeration you may need if there isn’t a walk-in cooler or freezer.    

You can buy this equipment second hand when you’re renting a vacant restaurant space.  In most major cities, there are multiple dealers if you simply Google, “Equipment Supply Companies.” 

Look at the pricing on the seller’s websites and you’ll find that the cost to put a minimal kitchen together even with secondhand equipment runs about $30,000 to $40,000 so the restaurant brokers recommend you use around $35,000 as a baseline in your calculations.   On top of that you will need assorted mixing bowls, dough mixer, tongs, pans, pots, spatulas and cooking equipment in order to prepare food and move it from one place to another.  That may cost another $500 to $3000 new or used.

The next items you will need are for the front of the house.  First, you will need a POS or point of sale system to register sales transactions and also handle credit card payments.  You also need booths, tables, chairs or counters for the customers.  Lastly, you will need “small wares” or the silverware, salt and pepper shakers, etc. in order to serve the customers.  You’ll also need a couple of booster chairs and high chairs to accommodate children.  Depending on what you find available second hand, you could potentially furnish the front of the house for $2,500 to $10,000 including the POS system.

As you begin adding all this up, you’ll see that the restaurant brokers have already demonstrated that you need quite a few dollars to start up when renting a vacant restaurant space and that’s before you pay an electrician, plumber and carpenter to install the equipment, permit it appropriately and get it inspected. 

You’re still not ready to go however because you also need to get deposits together for the power, gas and landlord when you’re renting a vacant restaurant space.  That can run around $3,000 for electric, $1,500 for gas and 2-3 months of rent with the landlord.  All told, that can amount to another $7,000 TO $15,000 depending on the monthly rent. 

Let’s add this all up:

Equipment (Back of House)

$35,000

Small Wares (Back of House)

$500 - $3,000

Front of House (Furnishings & Smal Wares)

$2,500 – $10,000

Deposits

$7,000 - $15,000

Total Outlay:

$45,000 to $63,000

So, despite a zero cost, you can see from this example, that in many cases the option of renting a vacant restaurant space to save money can cost more than simply buying the assets of a restaurant for sale.  If you’re considering renting a vacant restaurant space, go through listings for sale that are offered for under $30,000 first.  You may be pleasantly surprised to learn it’s a cheaper option to simply buy someone else out and be ready to go.

Want to see some restaurants for sale?  Visit this link. restaurants for sale

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Topics: leasing a restaurant

Is the Landlord Your Partner in Selling Your Restaurant?

Posted by Robin Gagnon on Mar 25, 2013 2:23:00 PM

restaurant for saleIs the Landlord Your Partner in Selling Your Restaurant?

If you answered, no, think again.  Not only is the landlord a critical partner in the transfer of your business, he or she is the number one reason why deals to sell your restaurant fail.  If you are in the market to sell your restaurant, consider the role the landlord could play in your plans. 

Many landlords have the opportunity to either block, fail to approve or otherwise put the brakes on a deal to sell your restaurant that is otherwise looking like a paycheck for you. It’s always a good idea to pull out that lease and take a close look before listing or selling.  In fact, a good restaurant broker will insist on seeing the lease and any transfer language as well as question you about your relationship before putting your restaurant on the market.      

If you’re a good tenant that has always paid on time, this may actually work AGAINST you in a lease transfer.  We have had landlords tell the restaurant brokers they much prefer the tenant they are familiar with versus the untested one they don’t know. 

Here are just a few examples the restaurant brokers have personally observed in recent transactions that had the ability to destroy the chance for a business owner to sell their restaurant.

1)      Unreasonable transfer costs. Some landlords are sneaking language into leases that require they be paid ten or fifteen percent of the sales price to transfer a lease.  Unsuspecting tenants sign the lease without noticing the language and respond to the landlord request for a copy of the sales contract only to learn the landlord intends to enrich themselves unreasonably in the sale.  Savvy restaurant brokers always strike this language before a lease is issued but make sure you check yours BEFORE finalizing a sales price.  You may need to increase the price in order to cover a seriously unreasonable cost where the landlord essentially gets a commission for doing absolutely nothing  

2)      Failure to Approve.  Landlords are notorious for dragging their feet on approving deals.  They will pass you from one person to another without ever giving a reason why the new tenant that is just as credit qualified and experienced as you is not being approved.  In one of our most recent transactions, a despicable landlord has been dragging his feet for more than six months.  The local representatives have used every excuse in the book ranging from “the building was sold and thus we’re just running behind” to “it’s all in Sally’s court and we’re waiting on her to process it.”  The bottom line is that your lease should have a reasonable amount of time for a landlord to approve a new tenant or you may be waiting in limbo to sell your restaurant.  Time is your enemy in selling your restaurant so every day a buyer waits, he or she gets colder by the moment.  They have time to reconsider, get more opinions and just generally change their mind.  By dragging his or her feet, the landlord is consciously working to kill the deal.

3)     Designating a Tenant “In Default.”  One recent landlord, after five years with the same tenant and the same lease language, decided upon request for transfer to put the tenant “in default” for an upgrade that was required under the lease four years earlier.  After choosing not to enforce the terms of their own lease for four full years, they decided that instead of approving a new tenant, they would just kick the existing tenant out by using a landlord trick of placing the seller in default.  In this example, the property was sold and the prior landlord had waived the right to remodel but when the lease transferred to new ownership, this unscrupulous landlord was able to enforce it against the tenant. 

Sellers must make sure that any conversations with the landlord on these issues are carefully documented.  If you fail to do an upgrade to the center and have discussed it with the property manager, at a minimum send a letter or email message to the landlord saying, “Mr. Landlord.  As discussed with your representative on this day and time, the interior of the restaurant is in great condition and you have waived my requirement for an upgrade as indicated in the lease.  Please reply by email or mail so we both have this information for our records.”  Then HOLD ONTO this proof until the end of time. 

From the tone of this blog posting, it’s pretty clear that not only is the landlord, unfortunately, your partner in selling the restaurant, he’s often an unfriendly one.  Do not take anything for granted and make sure you are protected.  The restaurant brokers have written an entire chapter on this topic in our book Appetite for Acquisition.  For more fun information on landlords, read the chapter titled “The Landlord is Not Your Friend.”  Our book is available online from Amazon.com or directly from our publisher.

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Topics: selling a restaurant, leasing a restaurant

Used Restaurant Equipment and Vacant Space - A Recipe for Success

Posted by Robin Gagnon on Jan 28, 2013 4:25:00 PM

restaurant for lease

Starting on a shoestring?  Here’s the restaurant brokers recommendation – rent a vacant restaurant with used restaurant equipment.

We know that not everyone is loaded with capital or has a rich uncle on the sidelines ready to finance your restaurant dream.  Thankfully, that’s not the only way to get started in this business.  For those on a fixed budget, limited budget or even no budget, consider looking at a vacant space that has used restaurant equipment in place.  It’s a cheap and simple solution to get into business quickly and with the lowest costs. 

What are the pros and cons of renting a vacant space with used restaurant equipment?  Well, the positives definitely outnumber the negatives.

Pros:

A fully equipped kitchen is very costly to set up.  Compare pricing on just basic elements like a double fryer on popular equipment seller websites and a single piece ranges from $1,175.00 to $2,195.00 for new or used.   A stainless steel prep station with refrigeration on bottom can be $5,668 according to at least one website.  With these figures, it’s no wonder that a commercial kitchen costs upwards of $50,000 to $100,000 to set up.  Compare that with taking over a vacant restaurant for rent and paying nothing for the business.  Which sounds better to you?

Need another positive reason for taking over a vacant restaurant for rent with used restaurant equipment?  How about opening fast?  Time is money.  You can cut your time to open your business dramatically by taking over something ready to go versus trying to purchase equipment, deal with equipment cancellations or supplier back orders.  Even if you do assemble everything you need, you still have to schedule and deal with plumbers, electricians and more to get it all installed.

Want another helpful reason to take over a vacant restaurant for rent with used restaurant equipment?  Here’s a hint.  It also saves you money.  Landlords often provide a few months of free or reduced rent when you’re starting out.  You can use that free rent period to be making sales instead of arranging equipment and getting the business ready.  That’s free cash flow – just what you need when you’re launching a new restaurant.

Cons:

Are there some minuses?  Yes, but the biggest negative to getting a vacant restaurant for lease with used restaurant equipment is finding one.  This type of listing is a hot commodity and though these restaurant brokers have several of these listed at any given time, they move quickly.

One other disadvantage to leasing a business with used restaurant equipment could be equipment condition.  Depending on the situation, the used restaurant equipment may have a few miles on it.  It may not be clean, shiny and perfect.  It may even need minor repairs but compare that to the cost of buying new equipment and you’ll be saying, “oh yeah, this makes some sense.”  On the other hand, as restaurant brokers we have seen six burner stoves with ten years on them going strong.  The very construction of most kitchen hardware means it is built to last.

How do you overcome the down side to leasing a vacant restaurant space with used equipment?  The best advice we can give you is to find a strong restaurant broker.  He or she will have an entire list of inspectors and repair specialists to assess the condition and operation of the used restaurant equipment before you take it over.  Another hint from the restrestaurants for saleaurant brokers – do not sign the lease before you get the gas and electric turned on for the inspections.

At the end of the day, if you’re low on funds but want to open a restaurant, taking over a vacant space for lease with used restaurant equipment is an inexpensive and practical way to get started.

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Topics: restaurant brokers, leasing a restaurant