Looking at a space - What to look for?

Looking at a storefront location later this week. Space is empty except for the hood system from the previous tenant. There’s nothing in FAQ about this. Any tips? (Landlord or building related.)

Make sure the supporting walls are sturdy.

dealing with town officials when buying pizza location
http://www.pmq.com//tt/viewtopic.php?t= … 36f7912ccb

Found An Abandoned Shop…Need Advice!
http://www.pmq.com//tt/viewtopic.php?t= … 44ed29e7f8

OK guys here we go
http://www.pmq.com//tt/viewtopic.php?t= … f52083dc77

Quote from George Mills:
“Just a word of caution:

Just because there is a hood in a building do not assume it will meet the current code.

The same is true for the rest of the building code, NSF rules and the Fire Marshall. In virtually
every jurisdiction nothing is Grand fathered in for a new operator he must bring everything up
to code before he gets an occupancy permit.

Many codes have changed in the last few years.”

Lease Negotiations
http://www.pmq.com//tt/viewtopic.php?t= … 66a9a405d0

New lease cost
http://www.pmq.com//tt/viewtopic.php?t= … 62a75a2e45

make sure it has a money tree in the back, I made this mistake turns out it was just a plain old maple.


PokerDealer: Thanks for the links.

Here’s everything I pulled out from them & definitions for CAM and Net since it’s a common question:

Types of Net Leases


  1. I would start with the lease. Make your commitment to the lease be contigent upon a limit of expense related to bringing the space to current code (or better yet, get the LL to cover those expenses, if any)

  2. Make the lease contigent upon receiving all governmental permits, licenses and passed inspections before any rent is due. (this takes care of the non-conforming use issue) In any case the lease, under intended use, should specify your intended use and that the LL represents that this use is permitted.
    a. There may be a chance that some of what is there now may be “non conforming” under current bylaws…So when a new tenant or owner takes over the premises have to be brought up to code…

  3. Ordinarily, none of this should be a problem. In most places, continuing the most recent use requires no changes. Most changes in code are triggered by construction or remodel that requires a permit. This is not the case everywhere though.

  4. You can probably apply for the business license (if your area has such), and food service license before you have a lease in force as long as your LL agrees and get the answers you need.

  5. I recommend contacting the building department and/or health department and/or fire marshal and ask if they do “pre-construction conferences”. Use those words to begin with. The agents in my town were glad to hear I wanted to take it seriously, and spent a few minutes with me. It may cost a few bucks for an inspection fee, but well worth the investment.

  6. Make sure your exclusives are right. It still surprises me when people sign leases without them.

  7. I have no problem with % rent if the % makes sense. Bottom line, if your occupancy cost comes in under 10% of sales rent will not be your problem. Look for a base or “minimum rent” that is below market value and a % rent with a “natural break point”.

For example, on 1000 square foot location, if market rent in your area is $20 per foot the annual rent would be $20,000. If your “minimum rent” was $16,000 and your break point for percentage rent at 8% was 200K in sales you would have a “natural break” as 8% of 200K is 16K. You would then pay 8% of sales above the 200K level meaning you would have to do another 50K before your rent rose to the market. You want the % to be calculated on the longest possible period of sales, hopefully anually, certainly not monthly. Quarterly is OK, semi anually is better. Why does it work? Because you benefit if sales are soft and the LL benefits if the location produces traffic.

  1. Triple net leases are the standard. As long as they exclude capital items and have basic protections for the tenant I think they are fair. For a LL to do it another way, they will need to raise the rent to cover the unexpected.

  2. The goal in lease comencment when there is work to be done is to eliminate the risk that your rent clock starts before you get open. Where there are factors that you can not control, you want to transfer the risk for those factors to the landlord.

Every deal is different and depends on local market conditions and the general balance of leverage between the tenant and the landlord. There is no “standard” when it comes to allowances, rent holidays or base rent.

Two pieces of advice: don’t get locked into a concept of some standard in one area of the lease you are unhappy with when you may be getting a good deal elsewhere in the deal that offesets the problem. Second, don’t pass up a good deal over a small amount of money. With 1200 feet in the lease a difference of $5 or $10 per foot in allownace is NOT a big deal if the rest of the deal is good.

  1. Also… get clarity on things like HVAC, fire suppression, floors and walls etc before you worry about the allowance. THERE IS NO SUCH THING AS A VANILLA FINISH. It is a meaningless term. You need to DEFINE each and every aspect of the work to be done and clarify WHO is doing it and WHO is paying for it.

Hi Son:

You have received much great advise in the proceeding posts.

The size of the facility was not indicated. Are you doing a DLCO or will you offer table service?

We get many requests for our free floor plans where there simply is not enough space for the proposed enterprise.

If you secure this location, or another, we will be happy to do a floor plan for you at no charge.

George Mills