Business and Operations
Finding space for your pizzeria: Making dough with Diane
By Diane Chiasson
Finding a commercial space for your new pizzeria operation can be a challenge. Leasing a commercial retail space will be one of your biggest operating expenses, and there are dozens of details that can go wrong.
It will involve more than finding the perfect business location and signing a lease at a price you can afford: it will take careful planning and consideration, great negotiating skills and proper budgeting to find a suitable place that will meet your needs.
Whether you are leasing a space for your new pizza operation, or negotiating a good lease renewal, finding the right pizza store for lease comes down to three things: cost, size and location. Here are a few things to consider before you lease a commercial space for your pizzeria.
GET PROFESSIONAL ASSISTANCE
As you move through the negotiation process, don’t sign a lease without first having your real estate broker work through the complexities of a lease and negotiating a satisfactory deal on your behalf. There is no substitute for local knowledge, and your broker should definitely have in-depth knowledge of your area, knowing exactly who lives there and where the retail traffic is. Afterward you will need an experienced commercial real estate lawyer to review your entire lease document. This expert should help you negotiate the best terms as well as include clauses that will benefit your business. You don’t want a general lawyer; you want a lawyer who negotiates leases every day of the year.
WHAT YOU SHOULD KNOW
There are several things you should know before you lease a commercial space for your pizzeria.
Location, location, location: It all comes down to location. As you know, for many new businesses, location can make or break the business. You will need to know everything you can about this location before you even think about leasing. Know and understand where your customers are and be sure that your business is located in a high-foot-traffic and high-visibility area. Your retail location needs to be in a safe area visible and accessible for customers and it should be near public transport and/or major highways. Perhaps you can get some inside information from tenants already in this area. Introduce yourself and ask for their honest opinion of the landlord, their thoughts on the level of property maintenance, and general information about the area.
Square footage: You will need to find out how the landlord has calculated the unit space. Is it based on the actual square footage or does it include space that doesn’t actually exist? Very often restaurant tenants are paying their rent per square foot, but often they are not receiving as much space as the lease agreement says. Make sure you measure your space properly. Always ask how the chargeable square footage is measured and calculated. Most commercial mall leases will include the square footage of your private retail space, plus a pro rata share of the building’s common areas such as lobbies, staircases, corridors and restrooms.
Traffic: Is there adequate foot traffic for your future pizza business? If you are leasing a retail space, the landlord should give you an accurate count of how many cars drive by each day. If they don’t have this information, grab a coffee, sit down in front of your future prospective retail space, and do a count on your own. You can also use the web to look up general demographics for an area/city or ask the town/city government if they have such information.
Parking: Check to see if there are enough parking areas or parking lots near your prospective retail space, and check out these parking lots on different days and different times of the day.
Lay out the space: You don’t want to pay for space that you won’t need but you also want to have enough space to accommodate your future business growth. Consider working with a designer just to give you a rough sketch/layout of what your pizzeria will look like before signing your lease. This little exercise will already give you an idea if the space is right for you. Think of all the aspects of this floor plan: back and front kitchen space, sales floor, cash area, to-go area, sitting area, stockroom, office and bathrooms.
Making improvements: Is this retail space basically a move-in-ready space or are you going to pay a lot more than you would for a similar size space that needs improvements, remodelling or major renovations? If you need to alter the space to suit the needs of your business, then you want to make sure it is clearly outlined in your lease, that is, what alterations you are allowed to make. Be sure to write down all the improvements that will be made and which party will have to pay for these improvements. You should also write down who will own these improvements – which normally the landlord does – and if you will need to return the space to its original condition when your lease expires. Whatever you do, make sure to allot a design budget to make your pizzeria visually appealing and reflective of your business personality.
Signage: You should have a clear understanding of what is and isn’t allowed in terms of your corporate signage on the outside of your property, sale signs, open/closed signs, and other signs in your storefront area.
Maintenance and repairs: Commercial leases often require the tenant to pay for all maintenance, except for that of exterior walls, roof and common areas.
Put everything in writing: Just remember that the lease you are to sign has been written to protect the landlord’s interest rather than yours. You want to make sure that all verbal agreements and promises as well as your personal interests are included in this written agreement. By putting everything in your written agreement, you will avoid unnecessary problems in the future. •
Diane Chiasson, FCSI, president of Chiasson Consultants Inc., has been helping food service, hospitality and retail operators increase sales for over 30 years by providing innovative and revenue-increasing food service and retail merchandising programs, interior design, branding, menu engineering, marketing and promotional campaigns. Contact her at 416-926-1338, toll-free at 1-888-926-6655 or firstname.lastname@example.org, or visit www.chiassonconsultants.com