Buying a New Restaurant

[bello]

Hello everyone:

I am buying an opened restaurant with 100 seats, 3340 square feet plus patio, the lease is $5845 plus $3200 for C.A.M & taxes.

The restaurant average sales is $50,000 per month.

Just want to know if the lease is ok for that restaurant or should I negotiate with the landlord?

Thanks,
Amir

[jonesg]

Its slightly high, 10% of mo sales is what I look for when evaluating locations, but its not rediculously out of line either. Especially if you think you could do better than the current operator.?

Thats also a negotiating purchase issue, if the landlord is ahead of the operator I'd use that to drive the purchase price down,

then negotiate the first 3 yrs rent down and make it back to the landlord in yrs 4 and 5. It never hurts to ask.

Be prepared to get deluged by chef offers after posting this here too.

[Derek Cooks]

Your opening overhead is $9,000 @ month before food and labor. That means you have to PROFIT $90 for every seat, then pay for their food and staff too. Not saying that's high or low or just right...just wondering if you've built up a business plan on it, and what THAT says about the numbers.

Do your homework; do it twice; that will tell if a biz is naughty or nice...

[billwells]

Here's my two cents. Text book says rent is 10% Your walking into 50,000 (if that is true) that means you will have to double the business from day one or start to "borrow" money from food or labor or your pocket and if you are like most when you walk in your pockets will be almost empty. Then the first month the ice machine will go.
Frankly you must ask yourself will I make it? Count the seats, do the selling hours look at the menu prices Does the math work? Where you are you will have bad days nobody in the sreets, can you handle that? not with that nut to crack.
My advise find a space that cheaper. My real advise is forget rent, buy a condo or something for sale, then after you have been there seven years it will be paid off by the customers, for you to sell. As an aside this is my last restaurant been here 8 years it's paid off the condos are worth almost a million that's where my rent went.

[chefa1a]

like they said it's all about the numbers

I'm in a resort area and we pay 19,000 a month for 70 seats winter, 140 with patio in the summer

food cost has been real low, we can charge resort prices

but fixed costs are fixed costs and you have to look at the bottom line every month

are you goin to be the chef=owner or owner-manager because thats really what you need, to be able to eliminate some labour costs

[BistroOwner1]

bello, I thinks that is a bit high as well. I have just about the same square footage and seating and pay $3555 per month, and that includes the cam fees.

Just a comparison for you.

[chefATL]

Bistro, you also have to compare the areas. You are just outside ov Charlottesville and he's in a pricey Metro area. His rents will be higher due to that fact alone. But I do agree about looking at the numbers. And also the fact, will you be habds on and in what capacity.

[jonesg]

"I have just about the same square footage and seating and pay $3555 per month"

Are you doing $50K a mo ?

[BistroOwner1]

It actually averages out to a bit more - some slower months, some busier. True point about the metro area though. The truth is, my competitors across the street are paying more than that for their lease, so perhaps I just have a good one.

[jonesg]

I just saw a place yesterday paying $10K rent a WEEK.!

Landlords a partner too, like it or not.!

[jayvader]

so you have the rent to pay
then you have employees to pay
then you have payroll taxes and unemployment insurence to pay witch works out to be about 55 % of what you pay each employee per hour

you have to Pay electricity gas water musak (if you want to play music in your place) phone cable (if you want TV) chemical needs for your sinks and dishwasher and mopping
factor in your 30% food cost and your 20% beverage cost (if you set your cost % at those numbers)
you will be quick to find that your daily costs range around $1500 or more a day

1500 x30 = 45,000 per month just make sure that the numbers you were quoted when purchacing were not estamates but reality - some sellers base their avarage sales on what the did during the busy season and do not acount for the slow months and are accually bleeding money execpt for the 3 peak months per year so it does not ballence out

why are they selling ?????

-edited for math-