By Stephani Robson
Stephani Robson is a Senior Lecturer at Cornell University’s School of Hotel Administration and teaches in the Food Business Fundamentals program at the International Culinary Center.
Site selection is about much more than finding the right size of space in the right neighborhood for your food business. Have you ever considered that doors have to be a certain width to fit industrial kitchen equipment? What about the visibility that your restaurant will garner, or lose, depending on where the front door is?
There are so many different elements that go into choosing the perfect location. That’s why we sat down with Food Business Fundamentals instructor and Senior Lecturer at Cornell University’s School of Hotel Administration, Stephani Robson, to learn how to get it right when choosing a location for your restaurant or food business. With over 30 years of experience designing restaurants and teaching restaurant design, Robson’s advice is some of the best in the business! When looking for a site, Robson shares, “a broker can be really helpful, but remember that the broker is working for the landlord, not for you.” Brokers get paid only when the space is leased, so they have a real incentive to get you to commit. Her first tip: Always do your homework first, and be sure to get everything in writing so your lawyer can review it before you sign a lease.
Here are the 4 things she recommends checking with your broker as you look for spaces!
Ask about the rent and how it is structured— the rent you pay should not exceed 6% of your total sales. If the rent you are quoted includes all property taxes, insurance, and common-area maintenance, that “all-in” rent should not exceed 10% of your sales. Be sure to find out whether rents being quoted are “all-in” (including “CAM” charges, building insurance and your share of the property taxes) or “triple net.” If these aren’t included, you will have to pay another 10-20% a month to cover these additional occupancy costs.
Rents vary widely depending on city and neighborhood, so get a feel for local rents by talking to a broker well before you complete your business plan. If your restaurant concept cannot easily generate the sales to cover the rent quoted using this 6% thumb-rule, do not sign the lease, no matter how appealing the space looks!
Street Level Matters
For restaurants, you really do need to be at street level. Spaces on second floors of buildings or above are also rarely successful for any kind of food business. However, a bar can sometimes work in a basement space that has direct access from the street— otherwise, save basements for storage and food prep! If a street level space you are looking at includes a basement, ask if there is any additional charge for the basement, or if you need to share that space with other building tenants. It’s not unusual to have to share the stairs to the basement with others which can make operations difficult if you need to use those stairs frequently.
Avoid Kitchen Upgrades
Find out if the space already has a grease trap or kitchen ventilation. Adding these can be really expensive — as in thousands or even tens of thousands of dollars. But if these are already in place, you’ll probably need to give them a really good professional cleaning before use. While you might be able to clean the grease trap yourself (although it’s a messy task!), you’ll need to spend a few hundred dollars or more having the hood and its associated duct-work professionally cleaned. At the same time, have the ventilation and fire protection systems checked by an engineer. That will cost you another couple of hundred, but will be money well spent.
Pay Attention to Doorways
Double check the width of all doorways before you buy any equipment. Many restaurant owners have found that they can’t get that new freezer or oven into their building! Sometimes, you can make a tight squeeze work by taking off the equipment’s legs or doors, or by removing the building’s door and its jamb (that’s the trim around the doorway), but try to avoid this kind of hassle by measuring carefully before you shop for your kitchen equipment and restaurant space.
ABOUT BUSINESS BITES
The BUSINESS BITES, brought to you by the Food Business Fundamentals program at ICC, is a series of workshops, discussion panels, networking events and resources designed to support entrepreneurs in the food industry.
Stephani Robson has over thirty years of experience designing restaurants and teaching restaurant development and design. She is a Senior Lecturer at Cornell University’s School of Hotel Administration and teaches in the Food Business Fundamentals program at the International Culinary Center. Stephani holds a PhD in environmental psychology from Cornell and does research on how the design of restaurants affects guests and operators.