I have a chance to take over a spot that used to be a Greek restaurant. It is on the beach in a resort town. The population off season is about 8,000 locals. In season the population reaches about 350,000. The spot has seating for 40 inside and another 40 outside. I would make it into a eat-in,carry out delivery operation. It is almost totally equipped all I would basically have to get is a pizza oven and dishes. The rent is $2,700 a month. During off season the landlord is willing to lower the rent to $2000 a month and even a free month if I wanted to close during the off season. The total beach area is about 9 to 10 miles. There are about 15 other pizzas places throughout. My question is would you take this opportunity?
Couple of questions : 1) you say “take over”, details, price, seller takeback, licensing, etc., 2) your pizza background (I can see that you joined the PMQ crowd over a year ago, so I’m guessing that you have experience in the business), 3) reputation of the greek restaurant (I’m guessing again, but think you will probably want to rename the place and create your own brand. And finally, your business plan…how will you stand out from the crowd of 15 other pizza joints (quality, price, marketing??).
Sure sounds like a solid market of potential customers with disposable income (after all, thats what we do on vacation…spend money). If the price is right, and if you have “the goods” (product, experience, drive, etc.), this could be a great opportunity.
My we ask what town you are in? 8000 regs and 350k on vacation seems a bit off. Not enough of a working regular base too support it unless we are talking spring breakers and your on season is a month from March to April with 350k drunk college kids. I would talk to bodegahwy “Steve” as he is also in a resort town and has lived this situation.
A lot of people who work in OC live west of town and commute in to work so the relationship of population to visitors is not as odd as it seems… but I would not take Wiki’s word on the visitor count. See my post below from the census info about how many units there are to rent. I combined that with a hotel room count from the visitor and convention bureau.
The town is Ocean City,Maryland. There is a university 30 minutes away and the kids usually do go there for Spring break. As for other questions,I have over 10 years in the pizza/restaurant business. When I take over I will need to pay 2,700 for 1st month and 2,700 for Secruity deposit. It includes any equipment that is already there. I will definitely be renaming the business since it will be pizza. We will be doing a lot of hotel marketing,especially to the hotels next to the center the shop is in which is also owned by the people who own the center. Both hotels have over 200 rooms. We will try to compete with the surrounding places on prices but hopefully better quality.
No,the zero was correct. This is from wikipedia.com “The population was 7,173 at the 2000 census, although during summer weekends the city hosts between 320,000 and 345,000 vacationers”
Total housing units 26317 100.00%
Occupied housing units 3750 14.25%
Vacant housing units 22567 85.75% (Rentals)
In addtion to 22K rental units there are about 9500 hotel rooms. Those stats would point to a potential visitor count of something like 100K people.
What I do not see is how spread out the area is that is included. From a practical point of view, delivery is really only effective within a few miles. I have been there back when I was doing commercial leasing work for a national retailer and was doing a site search. I remember it as being strung out along the shore for miles with a lot of high rise hotels and condos.
Good news: A ton of business when they are busy… but really dead in the off season with a bunch of restaurants fighting over the little business there is. You need to make your business plan for the ENTIRE years rent to be covered in the high season and have the business still make sense. Take that 25K total annual rent (how many “high season” months does the LL say there are?) I would say that any month with local restaurant sales tax revenue to the city that is higher than the average of the 12 months tax revenues is a “high season” month. The others are not.
Furthermore, your high season is gone for now. If you are going to take over the space and add equipment, I would not want to pay ANY rent until next high season. A compromise might be to offer to pay 10% of actual sales until next June.