Realities of Restaurant Real Estate
by Ira Spilky UCLA Lecture Spring 2005
THE REALITIES OF RESTAURANT REAL ESTATE
Develop your location/site selection criteria
or model as a business plan.
Complete all due diligence including current
and detailed demographic reports, traffic studies, parking field
plans, and tenant mix.
Verify that all land entitlements, licenses
and governmental permits are in place and can be acquired to open
Meet with city planning departments to achieve your construction
or re-modeling plans.
Make sure your chosen prime location economically
pencils with your financial pro-forma.
Analyze restaurant competition and their bottom
line performance in your trade area to determine what your estimated
market share percentage will be.
Live in the trade area for 7 days and nights
to obtain maximum on site information and record accordingly.
Honestly and objectively determine form your
research and your gut – “Is there a marriage between the demographic
profile of the area and your customer profile”?
Location – Location – Location means visibility,
accessibility and positioning your site selection development program.
Operators must create win-win relationship
deals with their landlord developers.
Document a detailed paper trail consisting
of letters of intent, counters, site submittals, governmental regs,
and lease drafts.
Negotiate your deal so that your company does
not compromise its cost of fixed overhead – knowing that cost is
constant heather your restaurant is open or closed.
Make sure you have an existing company infrastructure
in place to forward effectively.
WALK AWAY from a deal that does not make sense
for your Company or makes you feel uncomfortable.
Ira Spilky can be reached at 310-558-3241. Email address firstname.lastname@example.org.