I have the chance to open a dine-in gourmet pizza place which has always been my dream. I know everyone says that location and rent are keys to success so let me give you a little information on the location. It is on a end cap in a center with Super Walmart,a game store,a shoe store and a chineses restaurant. The space is 6100 sq. ft. The space is already almost set up for a restaurant from where someone had already started to open an italian eatery but had his partners walk out on him…It is in a town of 30,000 people. Right off the major highway. It also has a an area that the town has already approved a outside deck for. The main concern is the rent whick would be $6000 a month which includes the Cam charges. It would be mostly Dine-in and carryout. In a 5 mile radius there is only a Papa John’s,Domino’s and one new independant which does a quick service business. What are your opinions on this? Also I know it will be a struggle at first and I’m not looking to get rich on this. My wife makes a great income so we would have household monies. This has just always been my passion to do.
How much capital do you have? Everything sounds great, but with that rent…it could take some time. How much experience do you have making pizzas? Your competition sounds good as you will not necessarily be directly competing if you go gourmet. Have you done a cost analysis? Walmart can drive in customers for sure, but they are cheap, value buying customers mostly. It sounds like it could be awesome, but I am guessing you would need a minimum 100-150k up front to stay afloat long enough to break even.
In my opinion, Walmart = cheap = chucky cheese or LC/Dom type of business, NOT gourmet! Gourmet/dine-in = not cheap.
Nearly 30%, perhaps more, of Walmart customers do not even have a bank account. I think that type of market WILL NOT support a $6K lease, imho. Your town may support a gourmet dine-in store, but not in that location, and most likely, not at that lease level.
I have no problem paying high rent, provided there’s a market to support the business.
I agree that being in a Walmart plaza you do not yell high-end or gourmet. The rent is not bad on a sq ft basis… around $12 with cam… but is high because you have 6100 of those sq ft to fill. You might want to ask why the partners of the Italian place pulled out? Did they realize that a mid to high end Italian restaurant would be too risky? Maybe they were on to something. Tread lightly.
Just an added thought… what is the shoe store? Is it a fast-food take-out or buffet Chinese place? Then let’s talk about the average game shop customer. Are they stopping in for a meal or getting home asap with their Chinese take-out so they can play the new HALO for 48 straight hours… oh damn… my secrets out! :shock:
Hi Knight wing:
6000 sq ft is quite a bit to fill.
Can you get a liquor license? You would need one for a high end operation.
A bar room in an operation that size would be desired.
I just realized something that hits on what George just wrote. First, I agree you need a full bar with that large of a restaurant. More importantly, and not wanting to sterotype the average Walmart customer, but we have 4 Super Center Walmarts and a Sams Club in town here. All are in large commercial plazas with all types of businesses and the assortment of restaurants…both in the strip malls and stand alone units. Now the interesting thing… out of an estimated 30-35 food providers… I can not think of one that has alcohol. That just seems odd! Yes there are other restaurants within sight of the Walmart that do… but within the actual Walmart complex… including parking lot stand alones… not a one. Think of it what you want… just seems off.
Knightwing, what state are you in?
To chime in on some of your responses:
Anselmospizza: I have about $70,000 in available capital. I have been in the pizza buisness for about 20 years from delivering pizza to managing.
qcfmike: The backing partners pulled out because the person with the restaurant experience and recipes decided to go with another oppurtunity.
George: I’m sure a liquor license wouldn’t be out of the question due to the fact the city had already approved one for that location.
Pizza buffet, ala CiCi’s or Stevie B’s…just a thought…
I am in Maryland Nick. That is a thought at that Patriot and it would be the only pizza buffet around here.
When first reading my initial thoughts were …gourmet…walmart just like the other posters.
Rent does seem high and it sure does seem like a lot of space.
I’m not exactly sure what you mean, but I think you mean this is a gross lease? Or is it NNN but that includes the estimated CAM. If so, is that just the estimated CAM or does that include tax and insurance as well?
However, I don’t know many parts of the country where $12 a foot all-in would not be a good deal in a shopping center supporting a Wal-Mart. The total rent/month is certainly a big chunk. But on a per/square foot basis, I think it’s probably more than fair (not knowing where you live).
When you say “gourment” are you thinking Neapolitan style pizzas? If that’s what you mean, I think you could make it despite the wal-mart. You may not want to bill it as “gourmet”, but it could work.
When you say it is already almost set up for a restaurant, what do you mean? Are hoods/ansel installed? HVAC? Gas lines, grease trap, etc? Walk-in?
If you just have a framed shell with std. retail mechanicals, you could easily be looking at 250,000+ to build it out…
If you have all the mechanicals needed for a restaurant, I’d say $12/foot is a steal if you can generate the cash-flow in the restaurant.
Buffets, in general, are a challenge…its a numbers game, but doable…
Off hours, make 12" pies to order & bring them out to the customer…
$4.99-$5.99 is your price point…
Fill out your menu with a limited salad bar, some pasta and sweet desserts…
I’d do a buffet again, if the right opportunity came along…
You could find a used oven & mixer and build a simple warming set-up to display 10 or 12-12" pizzas and get a salad bar on ebay…
Tho I’m not sure if your population base will support that tho…
You can still hustle a special carry-out pizza as well…
Pcuezze yes it does have hoods,HVAC. The gas lines and grease trap has been installed. The plumbing has been set up. The bathrooms are up to code.
I disagree with this statement. I see Wal-mart as destination. People of many different economic classes shop there because it has low prices, plain and simple. Just because someone has money in the bank doesn’t preclude them from being “cheap” and shopping at Wal-mart. I think you are living in the past if you think Wal-mart customers can’t afford a $20 Gourmet Pizza. Sure, not all of them can, but its the law of numbers, and Wal-mart is a huge traffic draw.
Now, that being said, 6100 sq ft is huge. The downside of a huge location is that it looks a lot emptier when you have 9 of your 25 tables filled, as opposed to the 2500 sq ft place down the street that is “packed” with 9 of its 11 tables filled.
Negotiating extra months of free rent beyond the typical 3 months for build out may help give you some time, but that is a very big hole to start in every month.
In a town of 30,000 I think you should have no problem paying your bills. Not to say its gonna be as easy as open the doors and count the cash but doable if you know what you are doing. I will agree that 6000 is a lot for rent but for the amount of space you have it is very reasonable in a shopping center. Its not like the only customers you are gonna have are the ones from walmart and its not like everyone who shops at walmart is poor and cant afford a good pizza. I shop there myself and would bet that most others on here have or do also.
I think you want to make sure you take time planning out what is on your menu. Im not sure what you are planning besides pizza but make sure you stay away from the really low profit items and you should be ok.
Full bar would probably be a good addition.
I disagree with this statement.
No problem, its my opinion.
I dare ask the obvious question, how long has this 6100sf space been available, occupied, standing? How long has the Wal-Mart been at that location?
I see Wal-mart as destination.
You’re so very right. No question about it. But, remember, its the destination, not the other surrounding stores. Its the demographics of the shoppers that presents the challenge. The majority of them are DISCOUNT shoppers, not ‘gourmet.’
You’d stand a better chance of success selling $1.00 slices from inside Wal-Mart than selling gourmet pizzas next door. Wal-Mart and others are the reason T&B will never succeed. You’re competing against a massive mechanized pizza production center with national distribution & packaging.
Perhaps a game-centered, child oriented, cheap cheese pizza joint would stand a better chance of success at that location than gourmet. If you’re able to accept welfare debit cards it’d be even better.
Rather than haggling over opinions about outparcels and restaurants near Wal-Marts . . . I recommend going and looking. If that is a concern of yours, Knightwing, go find the closest 10 Wal-marts (makes sure they are similar to yours by matching supers to supers) and see what is in the same real estate and what is within, say a half mile. What kind of dining options, what sort of retail, and what sort of traffic. Then look at the market constitution of the area near where you are looking. See what sorts of places are nearby, within a mile or so.
Like attracts like in the business world. If it is a bunch of QSR, fast-food places nearby, then it means marketing will be a bigger need to get your identity and model in the minds and memories of folks. If you have more dining places that are mid-point and up (think Chili’s, Steak houses, white tablecloth stuff), then easier to sell an upscale place in that market as people will already have the mindset. Also, I find the higher the market position, the more other same-position restaurant types become competitive for your target customers.
For my advice, it is not a deal breaker, but a consideration when seeing what sort of places are attracted to Wal-Mart in your broad region. Know the market, know the marketing pressures and know the competition.(south GA is definitely not your fine dining options in Wal-Mart lots) YMMV.
I think it’s important to not automatically jump to a false demographic of the typical Walmart customer these days as well. I know it’s tempting to rely on the “peopleofwalmart.com” type stuff, but if you’ve been paying attention to marketing trends you’ll read that Wally is making a bold move to “local”, “natural”, “organic”, in their food wares. All the buzz words that are driving OUR customers as well.
Ok…shop there or not… we all have. Bottom line is we are talking about 6100 sq ft. That is not a little start up. That is going to take alot of investment to make it a higher end setting for people too enjoy. Yes I am sure there are some nicer restaurants around Walmarts somewhere… but he has a shoe store, a Chinese, and a pizza joint. Problem I see is that you do not have immediate shopping that does not require, for most cases, a return home with the groceries. Not like you can leave it all in the car while you sit down and enjoy a 60min plus meal. I think finding a slightly smaller spot near a mall or different set of stores would have a better chance to succeed.