Are you obsessed with opening a restaurant but high land prices hold you back? Many restaurant owners prefer to rent a restaurant space instead of making a land purchase. But does restaurant rental space prove to be a profitable deal for them?
A report by SWNS Digital reveals that Americans spend almost $2,500 annually on purchasing food from restaurants. This indicates a high demand for restaurant services. So, if you are a startup, renting a restaurant space is an ideal way to take the initiative.
In this blog, we will discuss everything about renting a restaurant space on flexible lease terms. Moreover, is renting a restaurant space profitable for a startup?
Why Restaurant Rental Space Is a Smart Move
According to a survey of Escoffier School of Culinary Arts, the demand for food service is going to double to almost $1.8 trillion in 2030. Whereas another report of Oysterlink indicates that America owns almost one million restaurants, food courts, and eateries.
So, to meet the rising demand for food, many business owners rent restaurants on leases. Here’s why restaurant rental space can be beneficial for your business.
1. Lower Startup and Operating Costs
Are you planning to build your restaurant but on a tight budget? Restaurant rental space works best for startups and small businesses.
Many business owners rent these spaces to save money. Because you don’t have to invest in land, building materials, or labor. Most of the rental spaces come with pre-built infrastructure. You just have to move in and then customize it according to your needs.
2. Prime Locations Without Prime Prices
Although purchasing land near main roads greatly benefits your business, it comes at a high cost. But why invest in purchasing land when you can rent a place at an affordable price?
Many rentals, like 25 Van Zant St, provide a restaurant rental space near highways and main roads at lower rates. It not only attracts a wider audience but also increases your sales.
3. No Construction or Permit Hassles
Do you want to start your restaurant without any delay? Then, get a pre-built restaurant space at 25 Van Zant St.
When you plan to build your restaurant from scratch, you have to face permits and zoning laws. It takes a lot of time and effort to get permission from higher authorities. But restaurant rental space helps you to avoid all these permit hassles with move-in buildings.
4. Reduced Risk in a High-Failure Industry
Are you unsure about the success of your restaurant? Starting a new business comes with a lot of uncertainties. You can never claim to be successful due to the regular market shifts.
Therefore, business owners avoid investing their money in building a restaurant from scratch. What if they fail to stand out? At first, they rent a space, and if it works for them, they plan to purchase land. After all, proper planning and strategic thinking are essential for building a successful business.
5. Easier Location Changes
Have you ever purchased land away from your target audience? Many businesses make this mistake, and then they regret buying it.
They not only invest their savings but also their time and effort. But a restaurant rental space saves you from this hassle. In case one location doesn’t benefit your business, you can relocate to a different rental space.
Types of Restaurant Leases
There are three types of renting a restaurant space in Connecticut. Every lease term differs from others in a variety of ways, so choose the one that fits your business needs best:
- Gross Lease: This is considered the most profitable way to rent a space for startups. You just have to pay your monthly rent, and the owner covers all bills.
- Net Lease: In this case, you have to pay your rent and some taxes as well. However, it depends on your rental location and the landlord.
- Percentage Lease: Some landlords make a deal with business owners. Many startups rent a space on a percentage lease, which involves paying a lower base rent plus a percentage of the business’s revenue.
How To Lease A Restaurant Space
Here are some factors that you need to consider while renting a restaurant space.
1. Know What You Need
Before renting a space, identify what your business demands. Do you have any structural and space size requirements? Then, look for the restaurant rental space that meets your concepts.
2. Make a Budget
Set your budget before planning everything and stick to it. Make sure that the total rental and bill costs never exceed 10% of your sales. Otherwise, your restaurant may become unsustainable.
3. Pick the Right Location
The location of your restaurant defines the success of your business. Renting a place near the train stations and highways can be beneficial for the growth of your business.
4. Inspect the Space Carefully
Inspect your restaurant rental space carefully before signing the contract. Can you customize this space according to your business requirements?
5. Understand the Lease Terms
Understand all types of lease terms that we have mentioned above. It will save you from being overcharged. Moreover, you will also have a clear understanding of repair and maintenance costs.
6. Sign the Contract and Move In
Make sure to cross-check everything before signing the contract. Some restaurant rentals try to scam you with unfavorable lease terms or high costs.
Who Should Consider Renting a Restaurant Space?
Here are some businesses that can rent the restaurant space to expand and grow their sales:
- Home-based food businesses planning to establish a separate physical location.
- Virtual restaurant brands that want to build their strong physical presence
- Caterers and bakers who want to expand their business on a large scale.
- Restaurant owners are looking to open another franchise.`
How Much Does It Cost to Rent a Restaurant Space?
The rates for restaurant rental space vary from region to region. If you live in Connecticut, the price will be different from those living in Texas. Here are some factors that affect the rental costs:
- Location: If you are looking to rent a space near main stations, then the price will be slightly higher as compared to small streets.
- Size of the restaurant rental space: If the area of the rental space is large, the price will also be high. Because landlords charge you per square foot.
- Additional Amenities: If the building has internet, customization options, and gym centers, then expect to pay high rentals.
The estimated rent depends on the location of the restaurant rental space:
| Location | Estimated Rent (Per Square Foot) |
| Small Town | $15 to $30 |
| Secondary Town | $30 to $ 50 |
| Medium Ranged Town | $50 to $150 |
| High Traffic Zone | $100 to $300+ |
Conclusion
Renting a restaurant space is the perfect solution for startups on a tight budget. It not only saves your money but also helps you to change location when needed. Moreover, restaurant rental space provides a chance to rent a location in a premium place at an affordable cost.
At 25 Van Zant St, we offer a variety of restaurant rental spaces from small businesses to large business owners. So, get your commercial kitchen rental space on flexible lease terms. We maintain transparency in our pricing and won’t overcharge you. Contact us right now to get an open floor that you can customize freely!
FAQs
1. Is renting out restaurant space a good investment?
Yes, restaurant rental space not only saves you money, but also provides a chance to change location if needed.
2. What should be included in a restaurant lease agreement?
Make sure to read a lease before signing it. It should include the rental cost, repair and maintenance terms, bill payment, and tax structures.
3. What are the risks of renting out a restaurant space?
Your landlord can kick you out at any time and can raise the rental price at any time. As a result, you may lose your potential customers.
