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Where to find closed restaurants to lease


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11 replies to this topic

#1 howsmatt

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Posted 04 January 2011 - 10:07 PM

I'm looking to open a restaurant and would like to take over where another has failed miserably. (N.B. I am not looking for ownership advice here) I have seen some places around town that are restaurants that have been repossessed. They could be rented without having to pay the landlord any price for the equipment etc. The problem is that they don't seem to advertise anywhere. One nice place I am considering doesn't even have a sign up.

Does anyone know of a source online or otherwise where I can find 4-5000 sq. ft. restaurants that I could walk into and start renting? Thanks.

#2 Doodad

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Posted 05 January 2011 - 06:15 AM

Call some of your commercial realtors or property managers in your area. They should know how to contact any listing service that might be around.

#3 IndyRob

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Posted 05 January 2011 - 07:03 AM

For some reason the phrase 'restaurant death watch' came to mind. Not expecting much, I googled it and was surprised to see some relevant hits. You might try that. Perhaps if you find one before it goes under you can have some control over what stays (and see what kind of problems they're having).

#4 Chris Amirault

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Posted 05 January 2011 - 08:44 AM

Take Doodad's advice. Commercial realtors are also the best keepers of "restaurant death watch" lists. They know who's not paying bills, who missed payroll, that stuff.
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#5 howsmatt

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Posted 10 January 2011 - 09:23 PM

Ya I am working with realtors but they up the price because they take a piece from the owner. Someone suggested also talking to used equipment guys. Thanks for the ideas, I'm open to more

#6 Edward J

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Posted 10 January 2011 - 11:49 PM

Ummmm....
Be carefull what you ask for, or you just might get what you want....

Now, if you wanted a crapped out restaurant for a catering or production kitchen, that's another story. And like all the others said, check with realators. Yes, they charge a commission, but they also give you a layer of security. Not every landlord is a saint....

The question you always have to ask yourself is: Why did the restaurant fail?
10 years ago I was in a similiar situation and must have checked out 25 clapped out places over a 6 mth period before getting the one that made the most sense. But I never wanted a'la carte, I wanted a place only for catering, and this is why it only took me 6 mths.

About 50% of the time, the places fail becasue of infrastructure or permit issues. If you have diddly-squat for parking, walk away. If you can't get a liquor license, walk away. If the place needs serious infrastructure upgrades, either cut a deal with the owner or walk away. If you pay for infrastructure upgrades on a leased place, you deserve to be taken. I guess this sounds harsh, and it is.

The other 50% of the time, you can fix up what was lousy: Bad food or service, chronic staffing problems, complete and utter ignorence of building and health codes, no financial backup to hold you over the critical first few years, no marketing stratedgy, and, of course, operator fatigue.

Beware the used food eqpt dealer. By the time one of those boys tells you about a place, he's picked the carcass clean--I mean removed the hood and Ansul system and walk-in. And these guys don't like to make a deal on any piece of equipment unless they can make a minimum of 150% mark up. Yes, 150, not 15.

Beware the indoor shopping mall, the leases are "performace driven". If you make under what they want you to make, they kick you out, over the minimum, they want a bigger slice. Why do you think every store in the mall has the same cash register?

DAMHIKT..................

#7 Chris Amirault

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Posted 11 January 2011 - 07:42 AM

Wow. I just watched one restaurant switch hands and go through its first nine months, and I'm now watching another try to get going amidst all of the delays and frustrations.... EdwardJ, you nailed it.
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#8 Dave the Cook

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Posted 11 January 2011 - 12:53 PM

. . .

And like all the others said, check with realators. Yes, they charge a commission, but they also give you a layer of security. Not every landlord is a saint....
. . .

Things may be different where you are, but in many of the US states, the realtor works for the seller, even though their demeanor towards you may suggest otherwise -- that's the art of selling. That's not to say that any of them are unscrupulous, only that you should remember who's signing the paycheck.

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#9 Edward J

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Posted 11 January 2011 - 11:44 PM

Technically that's very true.

Money, however, comes from the buyer, not the seller..........

#10 Kajikit

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Posted 14 January 2011 - 09:53 AM

As a consumer, you see restaurants come and go... and come and go... and come and go - generally in the same location! There's got to be a reason why six businesses failed in the same spot, and the odds of a seventh succeeding where everyone else failed isn't very high. Be careful you're not buying a pig in a poke. Find out as much as you can about the history of any site you're considering - restaurants fail for all sorts of reasons, but not all of them are something that YOU can avoid.

#11 howsmatt

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Posted 14 January 2011 - 11:28 AM

Thanks to all. As I mentioned I am not looking for advice here. I am only looking for suggestions as to how to find these spaces that I know exist but are not advertised much. Also avoiding paying a real estate agent would be more money for other things.

#12 Edward J

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Posted 14 January 2011 - 01:07 PM

Like I said, you're going to have to deal with a real estate agent. You can check the MLS (multiple listing services), but in order to be on the MLS you need an agent to represent you.

Many landlords claim they can "kick the existing tennant out". But then, if you think about it, that could be you in two years time as well.