Looking for a “SIGN” from above…Do I want to take a leap of faith and go to the next level??? Full scale sit down, beer & wine, MORE OVERHEAD ??? I would not have to purchase any more equipment only $40k for everything in building, just move in with all my equipment plus whats there, just move & open doors…
2500 sqft, 2500 monthly rent plus overhead…
same location, different suite, outdoor seating in summer…
Wishing my dad was around for advice, so Im asking for it on here
Why did the last place in that space go out of business? How many restaurants have been in the space in the last 5-10 years?
My current landlord & his brothers own the restaurant, they were open for 2-3 yrs, there was a mexican restaurant in there prior, was there since plaza was built 7-8 yrs ago they moved back to their original location 2 bldg down, because it was a family owned business and could not afford the overhead.
My landlord & his brothers closed it because they have TO MUCH…They own like 10 Tim Hortons & are opening up 10 more around the state, they just want $40K for everything in bldg, they put alot of money into it when they first opened, they were never int he restaurant business prior except Tim Hortons.
Sorry they also own alot of commercial property, plazas and such
They did a good business, he has offered his staff to me, along with recipes, BUT I would NOT implement all his recipes just a few, in the last 2 days since he closed I have counted well over 60 cars pull in and out. He is the only sit down restaurant in the township and that offers beer & wine
I don’t often see people close money-makers… if anything - they sell them.
Have you asked to see their financials?
That said… they are either short sighted and willing to dump a loser for a short-term $40,000 gain… and in the process, maybe lose a tenant too if the thing falls apart…
Or… they really are just too busy to mess with it (tells me it’s a challenge)… and they truly think you’ll do well. Owner-operator vs. Absentee/part-time owner.
And… why did the Mexican Restaurant move?
I’m not trying to rain on your parade. But, if I were your “Dad” these are just a few of the questions I’d be asking you…
If you want to really talk this through - feel free to call me at my office tomorrow…
I’ll share with you how I purchased my pizzeria for $33,000 when they were asking $85,000. And how I also reduced my rent the very day after I bought the place…
702-966-3001 Pacific time… I’m in at 7 just about every day…
I will call you Thursday morning Thanks
Its not just move in & open doors.
As a new operator you will need an occupancy permit from the building department. You will have to submit complete plans and ventilation specifications covering the existing equipment and the equipment you are bringing in. All current codes and regulations will have to be met. The Health Deportment and fire Marshal’s codes will have to be met.
You need a mentor for this project consideration. Kameron may be the answer, if he is willing to give of his time. And he sounds like someone who could provide valuable guidance. Alternatively, maybe you know a restaurant owner/operator in a nearby township, with a liquor or beer license, who you respect, that might be willing to sit down with you to review the variables.
The question that I think you can answer now is the $40,000 price…just itemize and compare with “used” stuff available. In most cases, the offered price is negotiable…my advice is to negotiate. The worst that can happen is that they say “nope”, while the best is that the money stays in your pocket. They should also be willing to take a partial bath on the equipment valuation in order to secure a viable tenant. You also have a sense for how your product is perceived in the market…if they love ya without seating and a cold one to wash everything down, they will love ya all the more with a comfortable setting and service that is first rate. And the fact that it’s the only place around where someone can have a beer with pizza, makes it all the better.
If your “mentor” is willing, be sure to include a “pro forma breakeven analysis”…this will essentially show you what your gross sales will need to be to break even…if you are then convinced that you can sell more than that, the additional revenue will be reduced only by what they call marginal costs, which means that your additional sales, less your cost of ingredients and any addition to labor that might have been needed to produce those sales, will be pure profit (before taxes, of course).
Another thought. If you move forward with the new sit down place, will some of your sit down customers be customers who formerly ordered delivery. And if they are, how would that tradeoff effect your bottom line (will they buy more in the restaurant than they did when they got delivery, and will that translate into more, or less, profit). Also, remember that most states permit hourly rates paid to those who collect tips to be much lower than minimum wage law requirements (this might be helpful in performing your breakeven analysis).
Thank you for speaking with me Kamron
George I know all that stuff about getting all my ducks in a row first.
I am actually going to let my landlord sweat first, he is in absolutely no hurry to unload the suite within the first month, he & his family have more money than they know what to do with, SERIOUSLY…I know him & his family and so does ALLOT of people in the county, this will allow me time to get everything in order.
I am going to enlist the help of a friend who is a Commercial Realtor FIRST… To evaluate the $40K, the landlord wants for everything in the building, rent and negotiate the $2500 he claims he wants in rent per month, I have already spoke to a few others including my attorney and am getting alot of insight on how much rent we should pay as well as all the legalities that come with having a full scale sit down restaurant with beer & wine, and what we need to do.
I will keep all informed as to what happens if we actually do this.
I just picked up some inside(family) info as to why he closed the restaurant, the GM who is a cousin of an es trained relative, she stated people just dont want to spend the money, she tried everything to get business. From my perspective as to what I saw, they did pack the place on certain nites, (1) they have a banquet hall they let customers have for FREE, as long as the food was purchased from inside the restaurant, also they would have FREE wine tasting nites every 2 weeks.
2-3 months ago they tried to do breakfast Friday-Sunday & that did not pan out, who wants from an Italian restaurant ??
The owners are Lebanon, & was trying to sell high end Italian food, portions were to small, high priced and food was not that good. I tried many different dishes from his menu & not much of anything tempted my pallet, except maybe 1 dish Chicken Cremosi
I would drive by another Restaurant every nite on the way home, just in the township next to us, that had the same exact setup and menu, & that placed was packed every nite. So that tells me alot
Daisy, it looks like he’s charging you $40K for some old equipment and an opportunity to pay him more rent in his ‘failed’ location. Be careful.
I’m all for not buying someone else’s oxygen. One could have the argument that a closed business is worth nothing being that it has 0 sales. My question is and always has been- if it costs 80,000 minimum to get a place up and running why is it so bad to buy one for say 50,000 that is ready to go. Key money sucks but plenty of people go out of business. not all of them have bad locations.
ps- I bought a closed deli for 50k when I was 22. Previously 5 owners in 4 years. Put a little money into the place and opened a pizza shop. We have been in business for 6.5 years now. I chalk it up to the COST OF DOING BUSINESS. good luck.
Well like I said we are getting a commercial Realtor involved for pricing and my attorney for neg. of rent, we are just going to let him sweat it out for a month or so, & see what plays out.
I have had a lot of comments from my customers and other people that including business owners in the area, they believe we would do well, but thats just their opinion…
Just waiting it out