There are plenty of misconceptions about leasing a restaurant.  Here the most common three.

Myth #1: If I do the buying myself I can get a better deal because the landlord will not have to pay extra fees. This is a misconception because there is no financial gain if you are not represented by a broker. The reality is that the commission has already been determined on the restaurant space and remains the same even if you do not use the services of a restaurant broker plus the leasing agent for the landlord will receive 100 percent. Although the representative for the landlord can offer useful information you still have to be concerned about the things that he will not share with you. The landlord’s representative is familiar with the property and will have information pertaining to the property and current tenants however you can obtain all of the same information if you are represented by a restaurant broker. The representative for the landlord is not looking out for your best interests but if you use the services of a restaurant broker they will act on your behalf and be loyal to your interests. They will provide you with information if another space becomes available prior to the finalization of the lease and they will negotiate the lease with your best interests in mind. Additionally, they can provide you with sound advice and offer information about other restaurants in the local area.

Myth #2: I do not need to use a broker since all they do is call the number on the advertisement to set up arrangements for me to see the space. This is another common misconception because your broker can represent your best interests because they are experienced enough in the industry to negotiate a successful transaction. If you do it yourself you are on your own. Also, the reality is that it is much easier for them if you let the landlord’s representative handle the transaction because when someone else is looking out for your best interests they will challenge them at all costs. They also do not want to share the commission with your representative. For this reason, you do not want to have a family member that is involved with real estate to negotiate the deal so you can collect the commissions. Although you may gain thousands in the commission you may lose your fortune in the process due to a bad decision. If you work with an experienced restaurant broker they can keep you up to speed with industry specifics such as HVAC and hood system. Chances are the representative for the landlord does not specialize in the restaurant business so they would have no way of knowing whether an HVAC unit is properly sized for a restaurant operation. If you open your restaurant after negotiating the lease and start operating the unit, you will find that your customers are dying from the heat which will obliterate any commissions that you have collected. Also, the representative for the landlord will only be able to compare the rent that the landlord is charging. If you work with an experienced restaurant broker they will have comprehensive knowledge of the market level data and competing rents based on their experience with negotiating many leases with many landlords. The restaurant broker will have a handle on the latest trends with regard to rent abatements and concessions, tenant improvement money, and current leasing rates and terms available. The representative for the landlord may be aware of some of this information however they will not share it with you since it means negotiating against themselves.

Myth #3: If my lawyer is processing the terms of the lease it is not necessary to use a restaurant broker. This is the third misconception that could cost you time and money. When it comes to a commercial lease it will be necessary to have every resource you can to reduce the risk and minimize your costs. The average commercial lease can be in excess of $8000 per month over a period of five years which totals $480,000. Although your attorney has the skills necessary to act in your best interests by focusing on the language of the lease, an experienced restaurant broker can assist in the areas of the lease negotiation where your attorney lacks knowledge. The restaurant broker will make sure the lease is going to work out with your landlord by focusing on the business terms and making sure that getting in and out of the lease is covered in the event things to do not work out. You can look at it from the angle of a pre-nuptial agreement that can be followed in the event things go south with the relationship.