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Lease Restaurant Space: Finding Your Perfect Location

Tillie Demetriou
6 Jan 2023

Welcome to the exciting world of restaurant ownership! If you're reading this, chances are you've got a vision for the perfect dining spot, whether it's a cozy cafe, a trendy tapas bar, a turnkey restaurant or a classic Italian trattoria. And while the menu and decor are undoubtedly important, there's one factor that can make or break your restaurant's success: location.

Finding the right spot to set up shop is no small task. You've got to consider things like foot traffic, competition, accessibility, and, of course, your budget. It can be a daunting process but don't worry. We're here to help.

In this complete guide, we'll walk you through the ins and outs of:

  • Researching the local restaurant scene
  • How to lease restaurant space
  • Understanding your restaurant lease agreement
  • Negotiating the best terms for a commercial lease
  • Securing your space and getting ready to open

By the end of this guide, you'll have all the information you need to find and lease a restaurant space that fits your vision – and your budget. So let's dive in.

What is a restaurant lease?

A restaurant lease is a contractual agreement between a landlord and tenant outlining the terms of renting a restaurant space. The lease will specify details such as the length of time you're renting for, how much rent you'll pay, and what rights you have as a tenant. It's important to read the lease carefully and be aware of any potential issues before signing.

There are two types of commercial leases:

  • Gross lease: In a gross lease, the tenant pays a flat fee for rent and all associated expenses, including restaurant property taxes, insurance, and utilities.
  • Net lease: With a net lease, the tenant pays rent plus additional expenses such as taxes, insurance, and utilities.

When researching restaurant spaces, it's important to find out which type of lease the landlord is offering and make sure that you understand all the associated costs.

How much does a restaurant lease cost?

This is the million-dollar question – literally. Prices for restaurant spaces vary greatly depending on factors like size, location, amenities, and more. Generally speaking, you can expect to pay anywhere from $10/square foot to $100/square foot or more for a restaurant lease in a major city. reported the median cost of monthly rent for 496 restaurants across the country was $5000. However, it can be much, much more in major cities like New York, San Francisco, and Miami.

Keep in mind that rent isn't the only cost associated with leasing a restaurant space. You'll also need to factor in things like security deposits, insurance, and any remodeling or equipment costs.

Buying vs. leasing restaurant space

The first thing you'll need to decide is whether to buy or lease your restaurant space. Buying a property gives you greater control over your future, but it also comes with more upfront costs and potential risks down the line. Leasing may be the better option for first-time restaurant owners.

Here are some questions you should consider when deciding between buying and leasing:

  • What are the monthly lease costs?
  • How long is the lease agreement?
  • Are there any restrictions on what you can do with the space?
  • Does the owner offer any incentives, such as free rent or improvements to the property?
  • Are there opportunities for renewal or expansion in the future?

By finding the answers to these questions, you'll be better equipped to make an informed decision on whether you should buy or lease your restaurant space.

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How to lease a restaurant - 5 simple steps

Now that you know the basics of a restaurant lease, let's take a look at the step-by-step process for finding and leasing your perfect space.

Step 1: determine your budget and desired location

Before you start looking at specific spaces, it's important to have a clear idea of what you can afford and what you're looking for in a location. The cost of leasing restaurant space can vary widely depending on factors such as size in square foot, location, and condition of the property. It's a good idea to consult with a real estate agent or do some research online to get a rough idea of what you can expect to pay in your desired area.

In addition to the budget, you'll want to consider other factors when deciding on a location. Some things to consider might include the following:

  • Proximity to your target market: Is the area you're looking at close to people who are likely to come to your restaurant?
  • Competition from other restaurants in the area: How much competition is there in the area?
  • Accessibility: Is the space easy to find and accessible by public transportation?
  • Visibility and foot traffic: Is the space visible from the street, and does it get a lot of foot traffic?

Once you have a sense of what you can afford and what you're looking for in a location, you can start searching for available spaces. There are many online tools and resources that can help you find properties that meet your criteria. You can also work with a real estate agent or commercial real estate broker to assist in your search.

Step 2: evaluate the potential restaurant location

So you've found a few spaces that seem like they might be a good fit for your restaurant space. What's next? It's important to thoroughly evaluate any potential location before committing. Here are some steps you can take:

Do your research:

It's important to have a good understanding of the local market and demographic. This will help you determine whether the restaurant space and location is a good fit for your concept. You can gather information on population, income levels, and local competition to get a sense of the area.

Some ways to determine who your target market might include conducting market surveys, visiting local businesses, or utilizing online resources like Census data. You can also create a customer persona to get a better understanding of who your ideal customers are.

Check out the location in person:

Before signing a restaurant lease agreement, make sure to visit the potential location in person. This is a great opportunity to get a feel for the space and evaluate things like parking, accessibility, foot traffic, and visibility. Make sure to take pictures and talk to any businesses in the area for feedback.

Assess the layout:

Think about how the layout of the space will work for your restaurant. Is there enough room for your desired number of tables and chairs in the dining room? Is the kitchen setup suitable for your needs? Are there enough bathrooms, and is the ADA compliant? It's important to ensure that the commercial space is suitable for your restaurant before signing a commercial lease agreement.

Consider the lease terms:

Be sure to carefully review the terms of the lease before making a decision. Pay particular attention to things like the length of the lease, the amount of monthly rent, property taxes, and any provisions for renewing or terminating the lease. Make sure that the lease terms are agreeable to both you and your landlord.

By taking the time to carefully evaluate a potential restaurant location, you can increase your chances of finding a commercial space that will set the stage for a successful restaurant.

Step 3: negotiating the lease agreement

Once you've found a location that you feel is a good fit for your restaurant, it's time to start negotiations on the commercial lease. This can be a complex process, so it's a good idea to work with a real estate agent or lawyer to help you navigate the process.

Here are some tips for negotiating the best deal:

Understand the terms of the commercial lease:

Make sure you fully understand all of the terms of the lease before signing on the dotted line. Pay particular attention to things like the length of the lease, the amount of rent, and any provisions for renewing or terminating the lease.

Negotiate for the best deal:

Don't be afraid to ask for a little wiggle room when looking for the best deal for your restaurant space. There may be room for negotiation on things like the length of the lease, the amount of monthly rent, and any provisions for renewing or terminating the lease.

Get it in writing:

Be sure to get any agreed-upon terms in writing as part of the lease agreement. This will help protect your interests and ensure that you and the landlord are on the same page regarding the restaurant space.

By taking the time to research potential locations, assess the layout of the space, and negotiate a favorable lease agreement, you can increase your chances of finding the perfect restaurant space.

Step 4: finalizing the lease and preparing to open

Congratulations, you've successfully negotiated a lease for your restaurant space! But the work isn't quite finished yet. Before you can open your doors, there are a few more steps you'll need to take.

Conduct a business plan:

Creating a well-thought-out business plan is an important step in the process of opening a restaurant. Your plan should include things like your financial projections, marketing strategy, menu planning, and staffing requirements.

Complete any necessary renovations or updates:

Depending on the condition of the commercial space, you may need to make some renovations or updates before you can start operating. This might include things like installing a new kitchen, painting or replacing flooring. Be sure to budget for these costs and allow enough time for the work to be completed.

Obtain all necessary permits and licenses:

You'll need to obtain any necessary permits and licenses before you can open your restaurant. This might include a business license, liquor license, and food service permit, among others. Be sure to research the specific requirements for your location and allow plenty of time to complete this process.

Hire and train staff:

As you get closer to opening, it's time to start thinking about hiring and training staff for your commercial space. This might include chefs, servers, and other front-of-house and back-of-house staff. Be sure to allow enough time to find and train the right team.

With these tasks completed, you'll be ready to open your doors and welcome your first customers. It's a lot of work, but the reward of successfully navigating the process of leasing and preparing a restaurant space is well worth it.

Step 5: ongoing management of the leased space's potential

Now that you've successfully leased and prepared your restaurant space, it's important to continue managing it effectively to ensure the success of your business. Here are a few tips for the ongoing management of your leased space:

Keep the space clean and well-maintained:

Regularly cleaning and maintaining your restaurant space is crucial for creating a positive experience for your customers. This might include things like keeping the floors and surfaces clean, fixing any damage or wear and tear and making sure all equipment is in good working order.

Communicate with your landlord:

It's important to maintain good communication with your landlord to ensure that any issues or concerns are addressed promptly. Be sure to inform your landlord of any necessary repairs or maintenance in a timely manner.

Review and renew the lease:

As the end of your lease approaches, it's a good idea to review the terms and consider whether it makes sense to renew or negotiate a new lease. Consider factors such as the success of your business, any changes in the local market, and any desired changes to the terms of the lease.

By staying on top of these tasks, you can effectively manage your leased restaurant space and set yourself up for long-term success.

How can a restaurant POS system help?

No matter what type of restaurant you lease, investing in a quality Point-of-Sale (POS) system can help streamline the entire process. A hospitality POS system helps you:

  • Manage inventory: With a restaurant POS system, you can easily track inventory and ensure that your restaurant is stocked with the right ingredients.
  • Speed up transactions: A POS system also helps speed up transactions at your restaurant by automating order-taking and payment processing services. This makes it easier for both customers and staff to move quickly through the checkout process.
  • Reduce paper waste: By using a restaurant POS system, you can reduce your reliance on paper receipts and other manual processes. This will help you save time, money, and resources while still providing excellent customer service.

With the right restaurant lease agreement in place and a reliable POS system to help manage operations, restaurant owners can confidently open their doors to customers.

Final Thoughts

Finding the right space is a challenging but highly rewarding task. Taking the time to research, negotiate, and finalize your lease agreement can make all the difference between success and failure. Make sure you have all your ducks in a row before signing on the dotted line and setting up shop!

With careful planning and preparation, you'll be ready for your future restaurant!


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