Negotiating for good leasing space for a restaurant is quite challenging. Opening a restaurant is a very profitable business; however, it requires a lot of research work. Restaurateurs may acquire significant knowledge about the ways of marketing, menus and managing the business, but they may not be necessarily knowledgeable about real estate. Generally, most of the restaurant tenants go through the process of leasing at least once in their whole life, yet they have to deal with experienced professionals who negotiate leases daily. Those professionals will try their best to lease their location on the maximum possible rates thus it needs careful consideration while dealing with the real estate aspects. Let see what the points to remember before leasing restaurant space is.
Be a smart negotiator
If you want to win the lease negotiation does your proper research work before entering, instead of settling in a deal recommended by someone. Be ready with a mindset to win the negotiation otherwise, you can not win and you have to satisfy the “good enough” philosophy. Offer a big commission, so that the landlord’s agent will negotiate fiercely to win.
Stay ready to walk away
For the discussion to lease restaurant space, keep your emotions aside while making any decision. Take your time and decide sensibly. Whoever would be desired to get a deal done will move forward to secure the location. Stay away from the deal that doesn’t fulfill your retirement. Don’t think twice to quit if the deal doesn’t match your need, this attitude will save you from any unnecessary stress.
A broker can not be your friend
Brokers generally work for earning their profits and commissions. They only target to get the best profitable deal for the landlord to get the highest rent and biggest deposit.
If you sign an agreement for higher rent and long term lease the agent earns the highest commission.
Hence, try to directly contact the listing agent instead of going to meet with the unrelated party who then takes you to the agent. By some smart steps, you can avoid a lot of commission expenses.
Don’t accept the very first offer
Even though the very first offer sounds reasonable to you, do not accept it immediately. If you don’t have enough ideas from which point you need to negotiate.
Take your time to think and ask for some other offers because most of the agent expects the counteroffers from the customer and start leasing negotiations at a higher number so that there would be a scope of compromise.
Don’t let the agent know your mood
Don’t let the agent know your intention at a very early stage of the conversation. If somewhere there is a scope to buy a property don’t express yourself completely. For example, if you tell that “this portion of accommodation is good for conducting function” gives your buying signal. In this case, your position on bargain becomes weaker. Don’t choose the words that may work against you soon.
Always ask for more than what you desire
Never settle on less, sound ambitious while making a deal. Your demand will set the highest benchmark for the agent. So, the agent will bound to show you the best offer against your demand.
For example, if you want the space on rent for 6 months then you ask for nine months because no one gets more than what they ask for. Don’t get disturbed after hearing “no” because counter-offers are an integral part of a business game.
Develop your bargaining skill
Whether you want a new restaurant space on a lease or you just want a lease renewal, you should develop your bargaining skill. Bargaining depends on several factors such as your restaurant’s size, your stake in a restaurant (you are the only owner or you are running a business on partnership). In addition to that, you can use your previous business experience if you have to handle the bargaining steps smartly.
Check the space by self-measurement
Check if you are going to get the exact square foot of space that you desired for. Most probably you are going to pay the rent based on how much sure fit land you are going to use. If the measuring space is less than what the owner is claiming then you must get the discount on rent.
In the above article, we have discussed several aspects of how to lease restaurant space. Leasing is just a process; the more you research the better deal you get. Educate yourself and attend the real estate webinars to enhance your negotiating skills. Always read the lease document thoroughly before signing an agreement. In leasing restaurant space you will get what you deserve, you will get what you negotiate.