7 Tips for Negotiating a Restaurant Lease

By Rachel Argyle

When looking at leasing a restaurant space, it's important to know your rights and not rush into any decisions. Here are some tips when negotiating a lease:

1.) If a premises has been vacant for a while and in this slow economic current climate, it may be possible to negotiate a lower monthly rent payment. Examples include

  • getting the first couple of months' start-up for free
  • not paying until the restaurant opens for business
  • or pro-rating rent so that it is very low rent for the first year of the lease but it increases thereafter (though be careful not to entrap yourself in an expensive lease because you back loaded the payments.)

2.) During the negotiation stages, ensure that the space is checked thoroughly and passes various inspections (fire safety, health inspector checks, etc.) and detail any items of disrepair before you move in. If any alterations or repairs are necessary, discuss with the landlord which repairs he is willing to foot the bill for. As a general rule, if any repairs will 'stay with the building' after you have left, such as plumbing work, it should be the landlord's responsibility to pay for these or to deduct the costs from your rent.

3.) Ensure that any agreements made with your landlord about paying for repairs are put into writing.

4.) Consider building in the following clauses to your lease agreement to protect your business. Possible add-on clauses include:

  • sublease (to allow you to sublet the space to another business if necessary).
  • a break clause. (allows you to end a lease early if necessary).
  • co-tenancy (if the landlord has an anchor tenant, this clause allows you to break the lease if this tenant is not replaced by a certain time).
  • exclusivity (to prevent your landlord leasing any other of his premises in the same location or complex to your direct competitors).

5.) Ask that the lease be put in the name of your corporation and not your name personally.

6.) It is not standard practice to pay for the landlords legal costs, so make sure you do not offer to do this during the negotiation phase.

7.) It is important to investigate the consequences of defaulting on lease payments. Find out how the landlord would react (e.g. will they lock the premises immediately or begin eviction proceedings?)

Raising Funds For Your Restaurant?

Foodstart helps restaurants, food trucks, breweries, cafes, and others in the food-and-beverage industry raise capital in small increments online.

The idea: create a network of people who want to see your business succeed and you will increase the chances that you actually will. It's the same reason the Green Bay Packers created 300,000 shareholders and the Obama campaigns raised money in five-dollar increments.

Here are some of the ways Foodstart can help you raise money for your business:

 

Pay Backers with Free Dessert, not Cash
With Foodstart you pay backers only in free perks and rewards that you determine in advance. Try getting Bank of America to do that!

 

Social-Media Marketing Program
Foodstart will provide online ads, campaign consultations, custom-designed fliers, custom Twitter and Facebook updates, and even will draft and distribute press releases - for free! more info

 

Seed Match
Foodstart will seed your business with $1,000 - just raise at least $5k from at least 20 different people.

 

Physical Backer Cards
Foodstart will send every backer a card they can use to redeem rewards.

 

Low Fees
Foodstart charge just 4% plus we pass along a 2.9% credit card processing fee - the lowest in community-funded finance!

 

Familiar Payment Platform
People back your business using their existing Amazon.com account.

 

Let's get started...

 
Minimum Amount: $500
Maximum Amount: $50,000
 

More Tips & Advice

10 Good Facebook Post Ideas For Foodtrucks

5 Tips for Choosing Restaurant Glassware

8 Tips for an Effective Restaurant Web Site

5 Tips for a Successful Crowdfunding Campaign on Foodstart

7 Things to Consider When Picking a Restaurant Location

7 Ways for Restaurants to Use Pinterest

9 Tips for Good Restaurant Signage

7 SEO Tips for Restaurants

7 Tips for Negotiating a Restaurant Lease

7 Examples of Great Restaurant Tweets

12 Ways to Finance a New Restaurant

12 Ways to Finance a Food Truck

10 Things to Know Before Applying for a Restaurant SBA Loan

9 Tips for Writing Good Restaurant Job Descriptions

10 Tips to Reduce Employee Theft at Restaurants

8 Things to Know About Putting Your Restaurant on Foursquare