I’m wondering what terms might be out there for leases. We’ve had very different quotes for properties, obvious differences in location etc, but the differences are striking.
Scenario: Small town, city population under 2,000, but within +/- 5 miles a population of about 10,000. It’s also the county seat of a decent-sized outer-ring suburb, you can’t swing the legendary dead cat without hitting a law firm, realtor, and bail bondsman. Public parking for county employees and public is usually pretty full, but plentiful.
1)The location nearest the courthouse complex (1 block from about 120 employees, and a couple hundred people doing business every day, another 150 employees 3 blocks away) would be ideal, but it’s never been a restaurant. It will take excessive $$ to build out. Landlord has no interest in helping with the build-out, in fact his requested deposit is so outrageous I suspect he has ulterior motives. No accusations, obviously. But he has taken a dream situation and made it totally unattractive. That we will pass on this location should be a sign that his demand is totally ridiculous.
Next best location-wise is 2 more blocks away, strip center, too far for most foot traffic in this situation, but not a bad place. The rent is actually pretty similar, but the deposit much more reasonable and still close enough to be highly viable for the lunch crowd.
Another option: About a mile away, unfinished space in a strip center, still to the studs. There is a great development just across the street, new businesses going in there. The rent here is actually about half, for the same space as the other two. It may be a better situation overall than #2
We’re considering an offer of base rate +% to the more reasonable landlords. I’ve not done this type of schedule before, wondering what has worked for start-up local operations? DI and delco, pizza salad sandwich. We have very modest projections for the start up to 6 months, breaking even at best for 2 months, then steadily even for a few more months. We’ll have a lot of family/close friends involved in operations to start, all experienced in restaurants if not pizza.
Is it practical to propose a sliding scale of %? Base rate for 2 months, maybe a little under their original quote, then two months in start the %? Or, wait for a year to start a %, paying only an agreed-upon base? This seems rudimentary, but in this era I’m not sure what to propose.