2020 was an extremely challenging year for the restaurant industry.
The pandemic has caused operators to have to pivot their business models and find innovation to be successful.
We have worked with several operators who have adapted, as well as those who continue to search & develop new concepts.
Most first-time restaurateurs are often torn between the decision of whether decision to buy an existing restaurant; or they should start from leasing a blank shell space.
Buying an existing restaurant can significantly reduce the cost and time required to get your new business running. Some hidden costs that operators do not factor in when evaluating whether to buy or to lease - include things like consultant fees, permitting costs/time, construction costs. In most B.C. municipalities, the standard time from signing a lease through to construction and opening is generally 8-10 months. This is especially long when an operator is looking to install a new Class 1 kitchen ventilation system, as mechanical engineers and other professionals are involved.
Another important factor to consider when determining to purchase an existing restaurant - is to evaluate the goodwill of the existing business. This can be either a positive or a negative factor, depending on how the business has established and marketed itself. We work with clients to review previous sales of an existing business, and assist them in understanding market value
Leasing a shell space can allow an operator to build their vision from scratch. Sometimes clients feel that they will save money looking at an existing restaurant – however find out through the design process that the space may not be suited to current building codes and regulations. It is equally important to understand these codes when developing a leased space – for example many mixed-use units will require an expensive ecology system to reduce odours that are omitted from the restaurant. We represent tenants to provide them good insight into the build-out process and negotiate favourable lease terms with their landlords.
Whether you decide to buy or lease, we recommend getting consultants - such as a professional architect, engineer and commercial general contractor engaged in the conversation early. This allows our clients to be fully aware of what they can except during the construction phase.