Last year was an amazing year for the restaurant entrepreneur in their quest for expansion. It seemed like the restaurant inventory virtually vanished overnight. When we take on new clients, there’s an expectation that they will have numerous choices of available restaurant space for lease or sale and they can make a decision at their leisure. This appears to be anything but true. Here’s the cure for the deadly disease: “analysis paralysis.”
Before most people got married, they dated several people and identified traits in each of them that they liked and disliked. Then, when they met the right person, they better understood what they were looking for. This is the same standard for selecting the restaurant space you want to invest your time and money in. So many factors come into play that you must be properly prepared in advance, in order to know whether the restaurant space you come across is a frog or a prince. Some factors include:
Unless you have purchased a restaurant franchise, you have a lot of work to do. Be prepared with your menu, seating requirements, theme, service type (QSR, Fast Casual, etc), accounting systems, and the list goes on…forever.
Size (overall square feet):
Bigger is definitely not better, when it comes to selecting your restaurant space, unless your concept needs the additional size. Even if it appears to be “free” or within your budget, you still should consider the additional costs of utilities, cleaning, repairs, décor, etc. Be lean and mean not fat and bloated.
Know where you want to be, but have the flexibility to select different trade areas. This will provide additional options for you when a good restaurant space comes available.
Don’t be that guy that says, “Don’t worry, I’ve got plenty of money.” That’s literally when I start to worry. What you believe may be plenty of money because it’s a lot to you. That doesn’t mean that it is. Most restaurants fail due to the lack of financial resources to handle the initial restaurant opening and the first year or two of business. Some have bought into the notion that they will make money in the first month of business and don’t take into account the initial cost of inventory, training, repairs and the list goes on… forever.
While this list can also go on forever, the restauranteur should always be looking at the dogs (in depth) to understand the “why” in why they don’t like it. Understand the “why” is an important step to saying yes without hesitation. In the restaurant real estate business, time kills deals. Before closing this article, I want to give you a couple more posts to take a look at. Both of these have to do with selecting the right restaurant space. The first article is called Understanding the Restaurant Real Estate Space. This article will give you some more tips on what to look at inside your potential space. The second article is called How to Select the Best Restaurant Real Estate Location.” You can probably guess what that one talks about. Both of those articles will be very helpful to you, if you’re preparing to find the a restaurant prince, rather than the restaurant frog!
About Michael Carro – Based in Pensacola, Florida, Michael has extensive commercial real estate experience and has earned many awards for his accomplishments. His passion is with restaurant real estate, and he is the host of The Restaurant Realty Show on News Radio 1620AM. Click here to read his full bio, or if you would like to contact him, you can call him at 850-610-8339, or email him at MCarro@SVN.com. You can also follow him on Twitter at @.
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