Looking for some feedback on this. Our store has been open 13 yrs now. We are doing very well, 18-20k per week on 6 days . We are very happy with our location and sales. However our landlord is building a new shopping center approx. 1000 feet from our current location. It will have better visibility from the road. He’s offering us $150k allowance to use however we want if we agree to leave our current spot and move to the new location. We would not be able to sell our business as one of our neighbors would be expanding into our current location. So my dilemma is this…with $150k from our landlord and moving our existing equipment over i think we could do this with less than $100k investment on our part. But i’m worried about taking on $100k in debt. We would also be expanding our square feet from 1900 to about 2500 so we can add more room to do more catering…
Sorry for the long post, wanted to make sure i git all the info in there
We did this a location 10 years ago. We also opened a new location 3 months ago. Here is how you calculate how much it will cost.
- Write down all the expenses involved, with your estimate on how much each item will cost
- Total that up
- Then double that total.
That being said 150K is a sweet deal. If I were you I would take it.
Don’t ask… don’t get.
Ask the LL for more.
Also: 150K from what point? With a basic lighting package, wall finishes, hood, grease trap, service upgrades in place that is very different number than from studs and concrete. Not really enough info in your post to tell what they are offering. Have you asked?
Most of the $150k would be going for build out. This will be brand new construction. So anything beyond the basic 4 walls and floor will be our cost. Also this wont be for another 1 1/2 years. With the exception of a new hood system, larger walk-in box, and a new 2 door freezer we won’t really need additional equipment
The investment in making this a restaurant space (grease trap, HVAC, electrical and plumbing upgrades, ADA bathrooms etc) are all things that the landlord will benefit from as long as he owns the building whether you are the tenant or not.
Unless you are in a really tight rental market where landlords get to dictate terms (sounds like not the case since he opened with an offer of 150K I would suggest that you ask for those upgrades to be in place before you start spending the “your” 150K. In a market where there is a lot of vacancy you can ask for more. Conversely, in a market where all space is full the LL can offer less.
Conceptually, the idea is that if the upgrade is not removable and any other restaurant would use the upgrade the LL pays. If the finishes or upgrades are not useful to all other restaurants, the tenant pays. There is no hard fast rule here, but in a balanced market that is the approach I prefer. Since pretty much all users will require HVAC, grease trap, utility upgrades and ADA compliance, the LL bears the cost for those things. Hoods, walk-ins, etc etc while used by many, are not used by all and belong to the tenant and can be removed. Floor layout and decoration, even though you don’t remove them usually are the tenant’s responsibility unless, as stated above there is a lot of vacancy and you can push for it.
The way you approach it is in the description of the premises as it is to be delivered to tenant for tenant’s work: Grease trap in place sufficient for tenant’s needs, X tons of HVAC, 3 phase power of X delivered to the box in premesis, etc
Do you know how many of your clients have actually seen your location in person?..I deal with many clients who market aggressively and could care less if their location had any visibility at all…