Restaurant For Lease?

You’re driving done the road, thinking about starting a restaurant and your see a “Restaurant For Lease” sign. Every time I see one of those signs I’m intrigued and I start doing a mental evaluation of the area, demographics and location.

My first instinct used to be to pick up the phone, call and ask “how much?” Over the years I’ve learned that the price is actually the last of my concerns.

First: Is This Restaurant For Lease Worth Leasing?

restaurant for leaseThe fact is that the ONLY reason a sign goes up saying “Restaurant For Lease” is because the previous business didn’t work (ie. failed). So, before you decide is the lease price, common area fees and terms are negotiable, you need to investigate why the previous restaurant owner is no longer in business.

There are a few factors that can be a dagger in the heart of any restaurant business.
For example, the first thing to examine is the restaurant location.
- is it in an area that is conducive to your type of traffic and market?
- is there lots of parking
- is there a lot of traffic
- is there too much traffic
Let me explain the TOO much traffic point.There is an optimum traffic flow that can really help a restaurant fill its seats. However, if the street in front of your restaurant becomes a congested high speed commuter route it then becomes dangerous for traffic coming a certain way to make a left turn into your place.

Also, a thriving restaurant was suddenly shocked when they found that their street was so busy that the city was putting up a concrete medium, and no access into their restaurant. They lost at least 50% of their business. Not to mention all the business they lost while the construction crews were digging up the street and causing daily detours.

If the location is the problem, even a restaurant for lease for a single dollar per month is not a good deal.

However, if you do some investigating and find that the lease includes a fully equipped kitchen, and a fully furnished restaurant, it would then be time to look at your financials and ask for the lease rate. Again, there are many reasons why the previous business is gone, and the restaurant is being offered for lease.

The great majority of the time the previous restaurant failed because of the owners decisions. Either the owner did something, or didn’t do something, or made some assumptions that proved to be false, or miss-managed the finances, etc. It’s great being the owner of a busy, successful restaurant. Unfortunately, if your restaurant fails, it’s probably YOUR fault. And if it succeeds, it’s all your fault too!

Do Your Homework When You See
A “Restaurant For Lease” Sign

Depending on what you find out about why the previous operator is no longer there, starting something knew in a fully furnished and equipped restaurant space could save you a lot of money.

Make sure you really dig down to get the reason why this space is unoccupied and there is a Restaurant For Lease sign in the window.