Start a Restaurant

Every month, an average of over 90 foodservice licenses are issued in every state. That’s over 4,500 new restaurants going into business every month across this country.

Do you have a restaurant space that you would like to fill with a quality tenant? Certainly there is no lack of tenants out there that would be interested in your site, so how do you go about finding the right tenant? This information was created specifically for Landlords who want to find the right tenant for their property.

When a prospective tenant is looking for a restaurant space, you as the prospective Landlord should know what they’re looking for, and in this order its; a lease they can afford, a site that fits their concept design wise, visible signage space, and parking. Everything beyond this is secondary.

Yes, the quality of the location is of vital importance, but the affordability of the site is paramount. Armed with this information, you should be able to present a sales package to your prospective tenant in terms that they can understand. If you can make the location financially easy to get into, that will give your prospective tenant the extra cash to commit to the other things related to getting the new restaurant off the ground.

In order to protect yourself from an unqualified tenant, there are many questions that you will want answers to. Set your expectations with the prospective tenant upon your first initial meeting. By doing this and listening closely to the answers, you can avoid a lot of potential pain for both of you.

Six factors that can help you select the right tenant:

#1. Create an interview checklist. You will want to cover a lot of ground with your new prospective tenant, and you’ll want to ask relevant questions. Depending on your unique situation, you may have legal restrictions placed on your ability to ask questions, so you will want to review your interview game plan with your legal advisor. This information is meant to be informative only and is not to be considered legal or accounting advice. (more…)

Every year, thousands of business owners and financial managers are faced with the task of obtaining attractive financing for equipment their firms want to acquire. Snaring the best leasing arrangement requires only a bit of planning and a smidgeon of finesse. You can save time, land a better lease deal and make the leasing experience less of a conundrum by considering several important factors.

Plan Ahead

Before seeking lease proposals, invest a little time in planning and preparing. Establish priorities by considering the relative importance of such factors as lease pricing, balance sheet considerations, ongoing leasing needs and the necessity of the prospective lessor to have specialized equipment/industry knowledge. If the transaction is relatively insignificant in the overall scheme of things, a truncated planning process might be in order. If not, allow enough time to: 1) identify and pre-qualify lessors, 2) review and select a lease proposal, 3) allow selected lessor to conduct due diligence and get credit approval, and 4) to complete lease documentation.

Assemble an information package for prospective lessors that anticipates what they will want to know before submitting a proposal, including: 1) background information on your company and management bios, 2) three years of financial statements and interim financials, 3) a list of company trade and credit references, and 4) a description of the equipment to be acquired, including acquisition cost. Anticipate questions about your firm and disclose them in advance.

Choose the Right Leasing Company

The starting point for getting an attractive leasing proposal is in choosing the right leasing companies to bid. All leasing companies are not alike. Some specialize in specific industries, some in certain equipment types, and still others in transaction sizes. Leasing companies also vary in size, capabilities, expertise and integrity. Do your homework to pre-qualify leasing companies that will bid. Lessor qualities to look for include: 1) knowledge; 2) reputation; 3) ability to perform; 4) helpful business contacts; and 5) a relationship approach. Try to identify at least three leasing companies to bid.

As in any field, leasing professionals have varying degrees of knowledge and expertise. Look for leasing representatives and managements that have a good understanding of lease structuring, equipment issues, documentation, credit evaluation, the capabilities of their firms, your industry and other leasing issues. Avoid lease ‘sellers’ with obvious limited knowledge. It is too easy to be led down the painful path of misinformation and misrepresentation.

Because the entry bar for setting up shop in equipment leasing is relatively low, it is important to locate leasing companies that have good reputations in the business. Check to see whether the bidding leasing companies belong to one or more of the major industry trade associations (e.g. ELA, EAEL, UAEL, and NAELB). While membership in these associations doesn’t guarantee high ethical standards, each of these organizations has standards and processes to review members’ unethical business practices. Contact relevant associations for references. Then, get several names of customers, banks and vendors to contact. (more…)

Seven ways for tenants to improve their chances before and during commercial lease negotiations.

Many tenants will openly admit to me they are poor negotiators. These people I can help. Its the business owners, retailers and tenants who think they know it all that invariably won’t do any homework. At my seminars, I teach tenants that good preparation is an excellent substitute for brilliant negotiating…so do your homework. This is your assignment:

Adopt a “Negotiate To Win” mindset. Many tenants get so focused on not losing their shirt they don’t even try to win. When the CBC television network asked me to appear on their Venture program I agreed. A crew of four followed me around for half a day filming and interviewing me in action. Most of that footage was left on the cutting room floor but one statement that made it to air was this “there is nothing wrong with negotiating aggressively”.

Tenants need to realize that the landlord’s realtor or leasing agent is negotiating to win – and tenants can (and should) do the same. I’ve actually had tenant clients discourage me from getting them too good of a deal or it might spoil the landlord/tenant relationship. No wonder some tenants are paying too much rent in poor locations. You don’t have to apologize for negotiating agressively if you speak and act professionally.

Determine what motivates the landlord. There are many different types of landlords such as financial institutions, pension funds, local developers and even small family property owners. You need to determine or find out who the landlord is and what their long-term goals are if you expect to have successful negotiations. For example, some landlords prefer the security that comes with a national tenant. Other landlords will want to maximize cash flow – so if an independent tenant will pay more rent than the national chain store they lease to the independent. While many landlords willing participate with flexible tenant incentives such as free rent and allowances this is not always the case. If you learn that a landlord for a particular property always insists on a personal guarantee and you are not prepared to give one then having this information in advance from the landlord’s leasing representative is helpful. Gathering information about the landlord will save you hours and even days going down what turns out to be the wrong path. (more…)