The first decision you need to make is the type of restaurant space you are looking lease or purchase. There are two choices.
Most franchises and national chain restaurants prefer to build-out their prototype store and search for space in shell condition.
If you have ever purchased a home, you have probably heard of the MLS or Multiple Listing Service.
If the house is listed with a real estate agent you will find it on the MLS. Today most residential listings can be found on numerous real estate websites.
Unfortunately, there is no centralized MLS for commercial real estate or restaurant properties.
There are numerous free and paid services that advertise either commercial properties for lease, business opportunities including restaurants and sites specifically advertising restaurants for sale and restaurants for lease. At this time there is no perfect solution.
The following is a partial list of sites that advertise commercial properties, business opportunities or available restaurants for sale or lease:
A restaurant real estate broker should have in depth knowledge of lease agreements, business sales and acquisitions, parking codes and liquor license regulations. An experienced restaurant real estate broker will have extensive relationships with advisors that specialize in restaurant transactions such as architects, kitchen designers, contractors, liquor license expediters and attorneys.
Business brokers typically sell a broad range of businesses. They may or may not have much experience with lease agreements and the many lease issues that can affect a business. There are many business brokers that do not cooperate with other brokers and limit access to their listings to buyers that contact them directly. If you decide to use a business broker to purchase a restaurant or sell a restaurant confirm in writing that they will cooperate and share a commission with brokers from a company other their own. Otherwise you risk seeing a limited number of opportunities or buyers if you are selling.
Commercial Real Estate Brokers
Commercial real estate covers a broad range of property types. Most commercial real estate agent or brokers specialize in a specific type of property or geographical area. For example, office agents specialize in office buildings and retail agents typically lease or sell retail properties and shopping centers. Most commercial real estate agents don’t have experience with business sales or acquisitions. If you plan to use a commercial real estate agent to secure a restaurant for lease, make sure they have some experience with restaurant leasing and are familiar with the specialized needs of restaurant operators.
For Lease Signs
Driving the neighborhoods that fit your concept is a great way to learn the market and determine important factors such as traffic patterns and which areas attract the most visitors.
Unfortunately, driving and calling “For Lease” signs is time consuming and frustrating.
If you want to know even basic information such as square footage, rental rate and if restaurant use permitted, you will need to leave a phone number and hope you receive a return call.
To make matters worse, you won’t know which property you called about unless you keep detailed notes.
Off Market Deals
This is the least used method by first-time restaurateurs. Rather than looking for available restaurants for sale and lease, specific properties are selected with the intent to buy the existing restauant from the current tenant or to negotiate a future lease with the landlord when the current lease expires.
This can be a very time-consuming process and requires the patience to possibly wait months or years into the future for a specific restaurant site.
If you wish to take this approach you will need to research the contact information for the landlord and existing restaurant owner. A restaurant real estate advisor can assist you with researching and contacting the parties involved.
In summary the methods above provide the most common ways to lease or buy a restaurant. No matter which options you chose, align yourself with experts that can help you navigate the many minefields of leasing or buying a restaurant.