Leasing a restaurant or hotel - what should be considered
Letting a hotel or restaurant has been a real challenge, and not just since the pandemic! What you should pay attention to, which steps you have to take.
Every owner or restaurateur is faced with the same difficult task when looking for a tenant for his property or catering business: to find the right tenant.
The tendering and illustration of the catering property must be professional and with a clear goal: the best possible representation of the catering property and the existing inventory. We also clean and polish our car, take pictures of it in the sunshine from all possible angles, before we put it on the common used car portals. So why not do the same for our restaurant or hotel ?! But not only the pictures are important, 360-degree tours are helpful, floor plans, etc. of the host's apartment, if any, a precise description of the competitive situation and the complete inventory list. Last but not least, the latest results also create trust and arouse interest! Especially since the outbreak of the pandemic, good restaurateurs have been very cautious about new projects. The financing of the start-up costs such as replacement or deposit for the existing inventory, as well as planned investments for the individual redesign, are very difficult to obtain from the house bank. The rating of the entire "gastronomy" industry has felt to have slipped again. It is all the more important to determine the expenses and the expected income with a well thought-out concept and associated business plan. It not only creates trust in its own company but also in the financing bank and, more importantly, in the lessor.
Where can I reach the potential tenants? Which media should I use for the tender? When leasing a restaurant or hotel, almost the same rule applies as when selling it: It is not a residential property - and only with the portals such as Immoscout, Immowelt or Ebay Classifieds are not doing it. Because the response and quality of the applicants is not always guaranteed and you can only reach restaurateurs who are actively looking at the portals. However, sometimes the best tenants are those who are in wages and dare to go into self-employment with the right property, or who are currently operating another property, but who may be "willing to change" with the right offer. There are of course specialist magazines such as Hogapage, DEHOGA or AHGZ. However, on the one hand it is not very cheap to use all of these media and on the other hand this is no guarantee for top applications. The costs in particular quickly run into several thousand euros, which by far exceed the costs of a specialist broker's fee. And another asset for the specialist broker: Ideally, they are networked with many restaurateurs, both via their own database and via social media. This is often the most efficient way to find the right restaurateurs or hotel operators.
Applications from interested parties are very different. From a one-liner: "I am interested" to a detailed description of the previous stations and about yourself, everything is included. Checking suitability here in discussions and through research requires a lot of experience and time. We recommend using these discussions and research to make a pre-selection and only invite the so-called "shortlist" to visit. A broker is also helpful here, as he already knows many applicants or can carry out the pre-selection in a more targeted and efficient manner. As a catering broker, we use a self-assessment in the first step, which must be available before we start discussions with interested parties. In the end, as in many business processes, not only the suitability of the candidate but also the chemistry between the lessor and the lessee and thus the basis of trust are decisive. This is then put to the test in personal conversations during the viewing appointments. It is not really clear to many applicants that leasing a restaurant or a hotel is not just a rental of the property + business operations, but also includes much more for the lessor. Often times the lessor is dependent on the success of the lessee. Only if the catering business is successful will he receive his rent regularly and punctually. Which brings us to the topic: How an appropriate rent is determined, we have examined in a separate post: Rent times eight
4. Lease Agreement
We strongly recommend having a lawyer check the lease for completeness and legal conformity. If you still want to draw up the contract yourself, you should at least use legally compliant templates. You can find one of these templates here>
The specialist broker also has its added value here. We have already helped draft hundreds of lease agreements and in most cases we have already found the variety of peculiarities. Of course, since the outbreak of the pandemic, special features have to be taken into account here as well. Good restaurateurs demand from the outset the regulation of the rent in the event of a new lockdown, graduated rent at the start in general and at the start after a possible lockdown.
Professional illustration of the catering business
Documenting the last results achieved creates trust
Reaching the right lease applicant at the right time via the right communal communion channel is the supreme discipline.
Make pre-selection based on suitability
Personal conversations are effective
Draw up the lease contract in full and in accordance with the law