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Common Mistakes You Should Avoid When Selling Your Restaurant

restaurants for rent, sale or lease in Tampa, Orlando, Bradenton, St Petersburg, Sarasota FL

It could be that you are selling your restaurant due to profitability and sustainability issues, or because you are venturing into other businesses or relocating to an entirely new place. Whatever your reason is, It is no doubt that you look forward to making a successful sale that gives you value for your property and effort.

While you may have been successful in the running of your business over the years, the process of selling your establishment is a different ball game altogether. It requires careful planning and preparation. You will also need the services of experts like attorneys, accountants, and restaurant real estate agents to help you speed up the transfer of ownership.
According to statistics, only 20 percent of businesses put on sale every year actually sell. If you are looking to sell off your restaurant, here are some common pitfalls you should avoid to ensure you do not fall into the 80 percent statistic of unsuccessful business sales.
1. Poor pricingThe pricing of your restaurant is one of the critical factors that will determine whether you will find a buyer quickly or not. However, most restaurant operators make the mistake of setting a price that does not reflect the real value of their business. The location and financial performance of your restaurant are key factors that determine the price you should sell your restaurant.

Poor pricing results from lack of valuation of the business and inadequate knowledge of market trends and pricing. It is therefore important to conduct a comprehensive assessment of your restaurant and have your financials in order and updated. This ensures that the price you choose is not too low, or too high compared to the value of your restaurant.

2. Selling to the wrong buyers

Finding the right buyer for your restaurant can be a daunting task. There are a lot of buyers and sellers in the restaurant real estate industry which makes competition tough and finding the right buyer for your property tougher.

Due to the difficulty of finding a buyer and doing a shoddy job in vetting prospects for their suitability, many restaurant operators make the mistake of selling to the wrong buyers who end up not offering value for their property. Poor negotiation skills also put you at risk of being cheated out of your restaurant’s proper worth — this especially common for those who do not seek the services of restaurant real estate brokers.

3. Failing to get involved in the marketing process

After deciding to sell your restaurant, you have found a real estate agent to help you in the process, and you think your work is officially done, right? Wrong! Most restaurant operators make the mistake of leaving everything in the hands of their restaurant real estate brokers.

As much as brokers are going to leverage on their expertise and networks in marketing your restaurant, you should also chip in. No one knows your restaurant and its selling points better other than you. It is prudent to consult your broker on the best way to market and advertise your restaurant that will not interfere with their activities. Getting involved instills confidence on prospective buyers and improves your chances of getting your restaurant off the market quickly.

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Things To Consider When Leasing Commercial Real Estate

commercial real estate leasing tips - things to remember when you lease commercial property

Commercial Real Estate Leasing Tips

A business can rent a commercial space from a commercial building owner by signing a rental agreement called commercial real estate lease. There are three main forms of commercial leases, namely full service, net, and modified gross leases.

It is important to understand how the entire process of identifying the right commercial lease works to avoid making costly mistakes. In this guide, we discuss the steps to follow and tips on how to choose, negotiate, and sign the right commercial lease.

Set your property parameters

With numerous commercial property options in the market, you need to set some commercial property parameters to help narrow down your search. In other words, the commercial space you are looking for should satisfy your business’s specific needs. Some of the important considerations you need to make when setting parameters include:

• Ideal customer: Businesses such as restaurants that are focused on attracting physical visitors should consider locations with high foot traffic. Also, you should know where your ideal customer is located. For example, while a Michelin Star restaurant will thrive in an affluent location, a fast-casual restaurant will do well in an area with people who have a preference for fast casual dining.

• Commercial property zoning: In the world of commercial real estate, zoning is done to dictate the type of business that can operate on a particular commercial property. Meaning, as a business owner, you cannot start a retail business in an area that is zoned for industrial use.

• Desired Size: You need to determine your workforce and the expected number of customers to derive the desired square footage. For instance, a restaurant requires 15 sq ft per customer, while offices may require up to 150 sq ft per employee.

• Maximum Budget: You have to determine your maximum monthly budget. With a predetermined budget, you can limit your searches to commercial spaces you can afford.

• Accessibility: It is important to ensure your restaurant or retail business is accessible, for you to do business. In fact, such businesses may need to have ample parking space.

Find the right broker

Leasing agents and tenant brokers facilitate most commercial real estate leases by representing landlords and tenants, respectively. Typically, the leasing agent is paid a commission of around 5% of the total lease by the landlord, while tenant brokers earn a percentage of the landlord’s overall commission called tenant broker’s fee. Remember, since the tenant benefits from the commission, he or she doesn’t have to work in the best interest of the tenant necessarily.

Although it is not mandatory to hire a tenant’s broker when searching for a commercial space, he or she can help you with a list of available options, give you potential financing options, and provide accurate marketing data and pricing.

Understand the types of commercial leases

• Full-Service Lease: The lease is commonly applied in leasing office space. This is an all-inclusive rent lease, which requires the landlord or property owner to pay for any expenses that may be associated with the commercial space including, utilities, repairs, maintenance, insurance, and taxes. The lease allows you to know and prepare for well your monthly or annual lease payments.
• Net Lease: This is an agreement where you pay a lower annual rent as compared to the actual lease amount of a full-service lease. However, the landlord may require you to pay the monthly “usual costs” of the commercial space such as property taxes and insurance. The net lease can be designed to be a single, double, or triple lease.
• Modified gross lease: This is a commercial lease that is considered as a compromise of the full service and net commercial leases. For instance, you may pay for the usual costs such as insurance and taxes, but in lump sum along with your rent. However, the landlord covers the cost of janitorial services and utilities.

It is possible to get caught up in a long-term commercial lease. ROI Commercial Property Brokerage is a leading provider of unmatchable commercial real estate services. We are focused on helping businesses scale their commercial spaces up or down depending on their current needs without the risk of facing penalties.

Our team of experienced restaurant property agents maintains close relationships in the Florida local markets, and thus a great source of valuable information. So, if you are looking for commercial real estate restaurants or help with negotiating favorable lease terms consider consulting with ROI Commercial Property Brokerage.

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Starting a Food Service Business without a Traditional Retail Restaurant Lease

Food Service Kitchens for Rent

Starting a business is not easy.  There is the question of capital, labor, taxes and location.  All of these things tend to make most people interested in starting a business strongly question whether or not they want to do it.

Multiply these factors by ten, and you have an idea of what it is like starting a restaurant.

The return on restaurant startups can be volatile, to say the least.  Once you take everything into consideration – labor, food cost, utilities and location, your dream restaurant concept can turn in to a paralyzing affair.

Location is one of the main things to consider.  Most young people enjoy the convenience of delivery and take out.  The best locations to start a restaurant that meets these needs are extraordinarily expensive.  Cheaper rents can be found in outlying, light industrial areas.  There is a tradeoff, however.  Potential patrons are unlikely to venture in to a decidedly “uncool” space.

There is a solution, though….the Ghost Kitchen.

This is not a place where pots and pans clang together for no reason, and people get a chill just walking inside of it.  Instead, it is a way for entrepreneurs looking to start a restaurant.

Ghost kitchens are like the AirBnB of the restaurant world.  Different entrepreneurs and franchise owners use a shared space to create dishes, serve customers and meet the needs of the delivery world, all without having to worry about paying a lease or exorbitant buildout costs.  A shared space, ghost kitchens can find and rent the space without the worry of meeting the high price of retail rent.

Another advantage of a ghost kitchen – they are not open to the public.  This means a significant savings in capital.  The only expenses are food, utilities, human resources and marketing.  Unlike the fixed costs of rent and retail space buildout, these aforementioned expenses are not fixed, and if you are not certain that the general public will be as crazy about your concept as you think they will, you are not committing in the long term.  You are able to have your cake and eat it too, by starting in a low overhead kitchen, but still able to test your concept.

Using services like Uber Eats, it gives the restaurateur time to learn valuable information about its customer base – what they like and don’t like, what their delivery times are and whether or not it is worth it to open a full customer centered stand alone.  When you work out the tweaks in your concept and food offerings, you can take the next step….signing a retail lease…when you are much more certain of its success.

Several large, metropolitan cities have successfully experimented with ghost kitchens, and the trend is certainly on the rise across the U.S.

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{Review} Noble Rice – Indeed

Noble Rice Review
KAMU – Grilled Duck with Cherry Asuki Gohan

Chef Eric Fralick and his partner in life and work, Adriana, have created a space in an intimate setting (at Platt and S. Blvd) where each evening a few lucky diners can feast with all their senses engaged. The design of both setting and food is a delicate balance of texture, color, taste and artistry all inspired by nature. With rough-hewn wood planks and exposed brick line the walls, soft suede covers the menu and carefully chosen vessels of wood, Asian-inspired china, rustic pottery, Plexiglas “ice pucks”, small wooden spoons, and other surprisingly creative serving pieces, Noble Rice delivers a beautiful and satisfying dining experience that is worth every dollar. You can see and taste the attention to detail with which each offering is created (without becoming precious) and this creates an amazing epicurean adventure.

Chef Fralick and his small, attentive staff afford every diner the opportunity to enjoy true Omakase (7 course chef-directed menu tasting) or Grand Tasting (15 courses) with an option for sake and wine pairings (the sake menu is extensive and impressive). Some of the best offerings beyond the traditional Nigiri, the menu, which changes frequently, include creative originals such as Oregon Maitake with Ramp Bleu and Leek Ash, Triple Black Ramen (with 18 hour house-made stock), and delightful creations such as pickled Kumamoto Oysters, Hokkaido Uni w/ caviar, Hokkaido Scallop (green curry vinaigrette and garlic chips), Purple Potato Gnocchi, and Foie gras Gelato! All served w/ house-made white and dark soy sauce along side bright pickled ginger and the best freshly made wasabi you’ll ever taste.

Tampa Fl - Shisho Leaf
SHISO LEAF TARTARE

The menu is rounded out with larger plates perfect for sharing such as King Salmon, Scallops, Duck and several grilled Wagyu offerings (my personal favorite is dressed in white truffle oil). Given the intimate space (which includes 4 prime seats at the Chef’s bar) reservations are recommended and you can find more information at www.noblericeco.com.

Umami thrives at Noble Rice.

E.G. Fendrick
11/06/2018