I am looking for some advice on a location I have the chance to lease. It was a former pizza operation that closed down a little over a year ago. The reason it closed down was due to the owners health. All the equipment was taken out except for the hood and walk-in. It needs very little construction work. It is in a strip mall with 8 other stores. The space is 2992 sq ft. There is daily traffic of 21,564. 3 mile radius population of 16,571 and a 5 mile radius of 24,959. We would offer mostly pizza,wings and drinks. As of now we would only do dine-in and carryout. There are 5 other places in that 3 mile radius including a Pizza Hut and Domino’s. My question is with the amount of rent is that taking to much of a risk to open a place?
I forgot to mention the rent is $4737 a month which includes cam charges
it closed down was due to the owners health
<----- One of the top BS reasons why a place went belly-up. I believe if a location was printing money, I don’t care if the owner died, people in the know would be all over it. Meaning it wouldn’t be empty for more than a week.
I don’t really know if your ‘traffic’ numbers mean anything or if they’re worth anything. I think a better measurement would be inquiring with the existing stores within the mall. How is their financial health? Any other restaurants in the strip?
The rent of $4700/mo is crazy. Is this in New York City? Is it beach front?
While its a nice population, I suspect that the low cost stores have the advantage. If you could get the rent at $1500/mo for the first 2-3 years, you might could take a swing at it, but at nearly $5K, you’d be throwing away money.
I’d pass on this opportunity.
Yeah it is nice to have a hood in place and a walkin… not too mention the grease trap is probably there… but you are talking $19 sq ft for this lease. That is pricey not too mention you have 3000 sq ft to play with. I also agree with the “closed because of health” reason being a little questionable. If the store was making money it would have stayed open even with a sick owner. Is it the landlord telling you this? I would check into the fiscal health of the other tenants and then sick down and have a lengthy talk with the landlord. If this is anything but a super high demand location…which since it’s been empty for over a year…tells me it is not… are the other 7 occupied? Are there any large anchors in the area or other restaurants? I would offer the landlord say… 6 months $0 rent to get you going and then 12 months at a reduced rate to see if you can make a go at it. He is just loosing by having it sit and with the economy what it is… he would probably take something over nothing. Also have a locked in extended lease at a more reasonable rate that takes effect when the 18 months are up. Talk to some local realtors and see what commercial space is going for and what else is available. It is always good to walk into a meeting with “other” options so you never feel like this is the only one and make a stupid decision. Good luck.
I did have the chance to talk to the realtor and she showed my invoices and sales records for the last few months the place was in business that she got from the previous owner. They averaged around $17000 a week in sales. The other spots in the strip are full. Plus a Walmart being right beside it. There is no restaurants in that strip but there is an Applebee’s a few feet away.
Oooooooh she’s sneaky.
Ask her to provide Sales Tax records.
1st things first. Where is this store located? Everyone on this board has a different opinion on overhead. For example- if you told me I could rent a 3,000 sq ft store next to a walmart for less than 5gs, I’d take two. My rent is
Over 5,000 for 1/3 of that rent. I’m not in NYC and I’m no where near a beach. To give you a better perspective on it… I could rent a 2,500 square foot place next to a brand new stop and shop. The store is gonna rent for 10,000 a month. Would I, probably not. Could I make it…probably.
Traffic count is very important…why?..how will these people know your there if they don’t pass you. Pizza is a convience item, and rarely will someone travel 5 miles to eat your pizza.
Why do you care what kind of business the last place did?
A- you are not buying his business, so you aren’t buying his customers. If he’s been closed for a year, his business is gone anyway
B- I could sell my business tommorow… Make 50 phone calls and take 100,000 in catering away from the current owner…why? Because I built this business , these people order from me…who’s to say they will order from you?
I have a contract with a local non profit org in my area…the lady told
Me today when she Picked up her order that she loves us for letting her mentally challenged adults come work for me two mornings a week. She loves that we taught them life skills they couldn’t obtain in other places. She also didn’t forget about the three parties this month we are doing and the 3 staff meetings a week we cater. This account is worth 20,000 a yeAr to me. To
You it’s only worth what you make it worth.
If your here to get approval from us for this business, your not. Nobody ever does. If your gonna make it, your gonna make it. Use this as a the wiki of pizza. Everyone can give you all the advice you need but when it
Comes to overhead, nobody will ever agree. Ever.
Totally agreed - more information needs to be known to analyze the rent. That price would be an absolute steal here in my neck of the woods. We pay over $30/sf (with CAM) at one of our locations and we’re more than happy to do it. High rents generally mean an affluent area, which in turn allows us to charge much higher prices that offset the higher rent.
I was too afraid to say this. But I feel the same way. The place near the closest walmart in my county started from scratch, took a doomed,cursed,hopeless location and does a serious business.
The shopping center where the store is shares the parking lot with the Walmart so it is a few feet away.
Great to see how many operators will take the time to consult with other operators.
The only comments I can make are. Do not count on the existing hood being up to the latest codes, they change periodically. Even if the hood meets current code it may be operating with a make up air unit that can drain thousands of dollars per year in profits.
If you can get the information on the hood any make up air system and the establishment A/C capacity I will be happy to check it out for you. I do not charge for that service
The “bad health” is used all the time. The first shop I bought, the owner told the landlord that she had cancer and needed to get out. The landlord would come in and ask about her all the time and tell me that he is praying for her…talk about bad karma, her long time boyfriend was diagnosed w cancer and passed away 8 years later.
I was buying equipment and ran into a realtor who was trying to rent out a large food place. It has been vacant for years. He was telling me how great this location was. I asked, why did the last place shut down? He said, I swear he said this, I still can’t believe he said this,…he said they were making to much money…NEVER TRUST ANYONE! Do your homework
5k is a lot but I also know of someone that pays 13k/month. None of us can really give you the polished answer without being in your shoes.
I can say this though, 5k/month rent = high retail sales weekly = a large staff(do you have this in line)=large inventory(do u have the cash) = can u do that kind of sales before it kills you?
I would be honest with my self. Get all the emotions out and look at this with zero emotions.
I will pay you 10,000 to come up with a top ten list on why you should not do this deal. (I’m not giving you 10grand but you see what I am saying)
After the list is made, share it with someone that is neutral and you will have your decision
Do not make a top 10 list of the good - this will counter the other list.
I’m not sure where your from but I’m from brooklyn NY…where pizza is king compared to all other take outs and dine is places…I was working at a pizzeria for 3 years and the rent their was 3200 a month for a 2000 sq ft place. Also there was a lot of schools near by which is always a plus. I just purchased my own pizzeria in long island and the rent is 1900 for a 2200 sq ft pizzeria all eqiupment was left by previous owner which he owned for 2 years and nice spanking new 17 000 dollar hood. What I’m doing is targeting college near by. I am in a frat and these colleges have my chapters their which was a big plus for my location choice. Also the rent and bills only totaled 3100 a month. In a small neighborhood you have to see what’s around and target that with extreme advertising. What I also did was set up a fax machine and set up a website where people could order from. On our first day we had a dj blasting music outside. Leaf tea also came and handed out free drinks for us. also what did best for my location was that…hey I’m from brooklyn( I know more and make better pizza than these other pizzerias) without even having to say it. I brought the place for 49 000 and it averages 7000 a week… bills rent food cost drink cost and workers totals for me 8500 a month