Whether you are opening a new restaurant or expanding to additional locations, there are a few things that you need to consider other than just the location, rental rate and time period for your new lease.
Since the pandemic, building out restaurants has become much more expensive and time consuming. The expense of getting a restaurant up and running have gone up because of the increase in the cost of materials, increased labor costs and the increase in costs associated with many cities and municipalities adding more rules and guidelines. When applying for permits for tenant improvements, many times, cities are adding new requirements such as upgrading to LED lighting, upgrading non ADA restrooms, adding fire sprinklers and adding an in ground grease interceptor (if cooking).
Another important factor to consider in your negotiations is the amount of time it will take to get your permits approved and your construction completed. While many cities are now open to the public, many are short on staff or have reduced their hours. These reductions in time and manpower means a longer turn around time to get your project approved and completed. For this reason, it is important to factor in the necessary time you will need to be sure you aren’t paying dead rent.
These are some reasons why it is important to have someone representing your best interest when negotiating the terms of the lease for you new location. The landlord rep broker may know some of the terms the landlord is willing to accept, but that doesn’t mean they are looking out for your best interest.
Written by: Patrick Sharples CA Lic # 0124543
714-293-2792
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