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Digsy.com (their free network of licensed commercial real estate experts do all the searching for you to save you time finding restaurant space for lease) Loopnet.com (you can search for commercial space for lease yourself, for a fee) BizBuySell.com (businesses for sale)
Do Your Restaurant Market Research. Unsplash via Apixaban. ... Don't Limit Yourself. ... Do a Landlord/Location Background Check. ... Do Know Your Budget. ... Don't Be Afraid to Haggle. ... Do Know What's Included With Rent. ... Do Have an Exit Plan.
Assuming you need 2,000 square feet to run your restaurant, you can pay between $5,000 and $8,300 per month including NNN charges.
Moll says that most lease terms for restaurants are about five years long, with additional five year options added on.
For example, a store in a popular shopping center located directly in front of a busy highway may run $23 per square foot. So for 1,900 square feet, that would cost approximately $3,642 per month. A similarly sized stand-alone building located one-half mile from that store may only be $11 per square foot.
Tenant Formation. Even if the business is run by one or two individuals or spouses, they should form an entity that shields them from personal liability. ... Measure the Premises. ... Relocation of Premises. ... Landlord's Work. ... Permitted Use. ... Continuous Operation. ... Operating Expenses. ... Increases in Operating Expenses.
The general rule of thumb is your total occupancy cost (rent and additional fees for property taxes, insurances, etc.) should not exceed 6-10% of your gross sales. The numbers that are right for your business may be lower or higher depending on other factors.
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. Including building repairs in the rent.
In most cases, the industry's collective experience shows that the lease cost should total no more than 5 to 8 percent of the restaurant's total revenues. On that basis, a neighborhood restaurant with $800,000 in sales should expect to pay $40,000 to $64,000 a year.
$278,400 Annual Rent ÷ 5% of Gross Sales = $5,568,000 Gross Sales. $278,400 Annual Rent ÷ 6% of Gross Sales = $4,640,000 Gross Sales. $278,400 Annual Rent ÷ 7% of Gross Sales = $3,977,143 Gross Sales. $278,400 Annual Rent ÷ 8% of Gross Sales = $3,480,000 Gross Sales.
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