Renting an unoccupied restaurant for lease may seem like an easy thing to do but we warn all restaurant buyers that in any negotiation, the landlord is not your friend. That's not easy to see when you begin looking at restaurant for lease but a landlord-tenant relationship shares a lot in common with a marriage. Both parties go in with the best of intentions and there’s a lot of love on both sides. However, if the relationship ends in a breakup (roughly 50% of all U.S. marriages end in divorce), things get a little rocky on the back end, and usually, no one remains friends. We never recommend negotiating a lease on your own with a landlord for any restaurant for lease. The landlord (or his leasing agent) has done these hundreds of times. For you, it may be the first time. Here are some quick tips to avoid disaster.
Tip Number 1: Assume the lease will be favorable only to the landlord and make sure you have both an attorney and another trusted resource review any document you sign on a restaurant for lease. Attorneys typically only look at the legal terms. You need someone like a restaurant broker to review the business terms of the lease including how you exit and how you assign it.
Tip Number 2: The person on the restaurant for lease sign in the window does not represent you. He represents the landlord. Get your own representation. It is usually at no charge to you.
Tip Number 3: Use someone that specializes in restaurants to help you if you are leasing an empty restaurant space, especially if it is new construction. Only a specialist will know how much HVAC capacity is needed for a restaurant operation and whether the hood system will pass muster in a health department inspection. Any second-generation (previously rented) restaurant for lease can also benefit from the eyes of an expert.
Finding a restaurant for lease is often the simplest part of the equation. Negotiating the terms and getting an agreement you can live with for five, ten, or even more years should be undertaken with caution. The restaurant brokers warn all buyers of the same thing. Unfortunately, the landlord is not your friend. For our full Ebook on leasing a restaurant, click to download at this link.