Site selection and Retail Leasing
Selecting the right location for your F&B business is critical. The wrong location can doom your business. And professional guidance through the leasing process is even more important.
Location. Location. Location.
Bob Dowdy, the founder of NRP and a successful restauranteur, often said … “You can’t hide good food!”
That statement is as true today as it was years ago. But in order to compete in today’s landscape – creating an experience is paramount. Whether that experience is a dive bar w peanuts on the floor or a high-end sushi extravaganza – what’s outside your walls matters.
And those first impressions are often made before guests show up at your front door. So, identifying a location that fits the vibe of your brand can make or break your operation.
It requires a team that looks deeper than rooftops and traffic counts to find the right location. Your brand deserves a commercial real estate team that understands both the mechanics of your business and the vibe of your brand – and can translate that language into the right real estate options.
Much like pairing a wine with an entrée, it’s important to pair your menu with a location that is going to serve up the potential for you to reach your core customer base. Knowing the habits and trends of your core customer is where the conversation starts and ends.
Your brand deserves a team that understands every element of your F&B business. A team that measures our success by your success, not by the number of transactions we do.
A CASE STUDY
A budding new breakfast biscuit concept that had seen huge success with their first 3 locations opened its doors in a very densely populated urban neighborhood. Every restaurant that opened in this area was immensely successful. In fact, today that neighborhood is still touted as a Top 5 retail destination on the East Coast. This area though is comprised of young, 20-something professionals who tend to stay away from carb-heavy breakfast options.
RESULTS
Very strong weekend sales, but otherwise dead during the work week. This business unfortunately only lasted 6 months. That brand was represented by a “reputable & national” commercial real estate firm with every software tool at their disposal – that probably indicated this location was a slam dunk. They missed one key ingredient in the process – understanding the core consumer appeal to the brand.
The Devil Is Always In The Details
Once a location is identified – negotiating a lease is a process of give & take that can take weeks or months to work through. And the devil is always in the details.
Commercial leases can be simple – but they rarely are. In many cases, a lease has been drawn up by a team of attorneys and designed to tilt the scales of fairness away from the tenant.
Our job is to guide you through this process to determine what is acceptable risk on your part – and what is an unacceptable tilt of the scales in the landlord’s favor.
Having NRP on your team will level the playing field back in your favor – and often our fees are paid by the landlord. The purpose of contracts, as they say, is to define how we break up or handle disagreements – and break ups if necessary.
Following are just a few of the “fine print” points that need to be considered in your lease …
- Acceptable rental payment terms – based on market value.
- Level of investment by landlord into the build out vs level of investment by tenant.
- Dedicated parking, if required – and adequate parking for the overall flow of the center.
- Acceptable amount of free rent period allowed for upfitting the space to tenant’s conditions.
- Transparency of CAM (Common Area Maintenance) charges.
- When/how options are exercised.
- Allowable use for the space – and exclusive rights to tenant’s menu mix.
- Maintenance & repairs – who is responsible?
- What events trigger a default from the tenant
- Can the lease be assigned? Exit strategy.
- Personal or corporate guaranty of lease.
- What events trigger a release of personal guaranty?
- Signage design details.
- Definition of operating hours.
- Who’s paying your broker? Landlord usually does.