Restaurants in Arroyo Grande: What to Check in Your Lease to Maximize Success

When anyone thinks about opening a restaurant, they first think about the food. However, food is not the priority for starting restaurants in Arroyo Grande; a great space is. Most of the startups are unable to buy a place for their business on the first go. 

Leasing the place is, more often than not becomes the only option for most of the Arroyo Grande restaurants. However, taking the lease is not as easy a job as it sounds. You have to be aware of the terms of the lease. In this way, you can reap the maximum benefits. The following tips will help you to get a handle on the situation. Check them out to make a big success.

Rental Terms

Negotiation is the only way of getting the maximum benefits from a lease. To start an effective negotiation, you have to know the rents of similar type of spaces available. Once you have researched and gathered the rents of the available spaces, you have to calculate whether you can afford the place or not.

Do the calculations on the basis of your projected sales. The rent of the space should not be more than 8% to 10% of your total sales. Don’t say yes to any percentage rent provisions. It can reveal the inner financial details of your business, which, in turn, can be harmful to your business. If you have to offer some percentage of your business to the owner, you should propose a fixed amount.

Operating Expenses

The lease is not the only expense you have to bear. The operating expenses of the property you are using, such as property tax, water tax, etc, should also be considered when you are taking up the lease. Be careful when you are signing the agreement. Some of the agreements include expenses that do not fall under the operating expenses. You must not shoulder all these burdens at any cost.

Exclusivity

You should introduce provisions that bar the owner from leasing the place to your direct competitors. This will protect your business from any sudden conflicts and losses. At the same time, you should keep your eyes open for any provisions that block your growth from taking place.

Starting a restaurant business is never easy. You have to keep your eyes and ears open all the time to prevent your business from any assault. Reading the above points will help you to get a good idea about reality even before you start the journey.