Free Restaurant Leasing Guide
I've received a number of questions regarding how to negotiate a restaurant lease from first time owners to experienced operators who previously had someone else do it for them; so I'm going to attempt answering all of your questions in one shot.
There seems to be a general distrust of Brokers among those submitting questions...which is understandable since Brokers are, ironically, not always properly incentivized to get their Clients the best deal possible.
Fiduciary duties / responsibilities aside - their income is directly tied to your expenditure. i.e., the more you pay (or the worse the Broker representing you does), the more they earn.
But Brokers add significant value in any real estate transaction - not only due their familiarity with the terrain but because the relationships they have, with Landlords and developers, can result in your getting a line on a great location before it even hits the open market.
That being said, engaging in any type of business activity without some base-level knowledge can be both intimidating and dangerous.
Although I have created this single document highlighting the most vital parts of a Lease Agreement (that covers a wide range of important topics from Square Footage to Landlord Contributions and Personal Guarantees); if I could only give you just two pieces of advice - they would simply be this:
"READ EVERY SINGLE WORD OF THE LEASE (DO NOT "GLOSS OVER" ANY PART)."
"STOP READING WHEN ENCOUNTERING ANY WORD OR PHRASE YOU DON'T UNDERSTAND
AND GOOGLE IT."
Remember: executing 10,000 leases for restaurants does not make any Broker a "restaurant expert". It makes them a restaurant leasing expert.
And while any lawyer or "leasing expert" can tell you whether or not a contract is legally binding, enforceable or in-line with other Agreements they've seen; the fact remains that any agreement is limited only by the parties' own: imagination, creativity and motivation to structure a mutually beneficial deal.
Successfully navigating a restaurant Lease requires intimate first hand knowledge of the industry including: restaurant operations, vagaries of economy and market variables (including both controllables and non-controllables) that impact every outlet's performance.
This free restaurant leasing guide entitled: "THE ANATOMY OF A RESTAURANT LEASE" highlights the most important parts of most retail Leases I've come across and then breaks them down into plain English…and it’s my gift to anyone inexperienced in commercial real estate.
The catch? This document, while free, is the early stages of a book I’m writing so I’ll be looking for something free from you in return: your email… so that I can follow-up with you and request some feedback.
If possible, please consider each of the points in this guide carefully prior to looking for a space.
If you've already started looking for a space…then take a look now before you actually start negotiating.
Any licensed Broker or Agent with integrity and a long-view approach to their own business should be willing to entertain any questions or thoughts you might have after reviewing this as it’s written and offered in the interest of transparency to help those who may not know what they’re getting into, mitigate the biggest pitfalls most commonly associated with hospitality-driven ventures.
"When the truly unforeseeable challenges present themselves, you don't want to be busy putting out the fires that could have been (and should have been) prevented in the first place."
Josh Sapienza | HospitalityHelpline.com