TIPS FOR GASTRONOMY LESSONS
If a restaurateur decides to lease a restaurant or hotel, he has to know the reference values. Because he can only run his business successfully if the amount of the lease is appropriate. What are the factors used to calculate the rent? Are there rent or lease tables that you can use as a guide? What role does sales expectation play?
In contrast to the residential sector, there is no rent index for catering properties. The lease is primarily derived from sales. In the case of ongoing operations, the actual turnover is relevant, in restaurants and hotels that are only just opening, the expected or forecast turnover.
Sales and attractiveness are half the rent
Of course, all other factors also play a role in determining the character of the object. Experienced brokers for gastronomy real estate who specialize in the brokerage of restaurants or hotels for lease recommend their clients not only to look at sales, but also to see all aspects that are success factors or have potential for success.
Location, competition, highlights?
Location, location, location - whenever a catering property is to be bought, rented or leased, the location is the A&O - as a starting point for good business. A hotel directly on the market square, a café in the city's most popular shopping street or a restaurant in the middle of the pedestrian zone has considerable advantages over a remote catering property. Therefore, the location of the property is the second most important factor when calculating the rent.
Gastronomy property with a celebrity factor?
The location has a strong influence on the market situation. If there is a very high demand for a certain offer that the company can offer regular customers, day trippers, tourists and other guests, this value is also factored in. This can relate to the construction of the property or the gastronomic-culinary offer, but also to intrinsic values. For example, is it a bar with a roof terrace, a hotel with a certain history? Does the catering property have a special characteristic that is directly linked to the house but is not tangible? For example, was the object used as a location for a famous film? Did many celebrities, writers or even emperors and kings reside there? Did the house have a known previous owner or builder? All of this ensures a high level of awareness even after a long time and attracts many guests.
Tip: Inquire with a broker for gastronomy real estate for lease about location advantages. - Even those who may not be obvious at first glance. An experienced, well-informed catering broker knows the history of the house or can research it seriously and thoroughly. His information helps him to judge whether the lease is appropriate or not. He also helps with any negotiations when it comes to leasing catering real estate.
Rule of thumb "Lease x Eight"
In the industry there are approximate guide values that can be used to calculate the lease. However, since the value of a catering property depends on a large number of factors, these are often not meaningful enough to determine the true value or the sales potential of a restaurant, hotel, café or inn. If a restaurant is available for lease, a lease rate between 8 - 12% of the annual net turnover is considered economically reasonable. For hotels it is between 15 and 25%. The general rule of thumb for restaurateurs is “rent times eight”. In other words: If the currently generated or forecast annual net sales are approximately eight times as high as the rent, the rent is appropriate. In normal cases, the high lease rates are hardly realizable; they can only be implemented in locations with a unique location advantage and enormous sales volume. These include, for example, rest stops on busy motorways, at international airports and at special sports and event venues.
Condition crucial
In addition to the turnover, future tenants should check the condition of the property, the equipment and upcoming investments that they would have to accept in addition to the lease.
Tip: Check the structural condition of the property. Are repairs or extensions due soon? How good are the devices, equipment, furniture and other things that you lease? If you are unsure, you should consult a catering broker who can expertly assess the condition, quality and sustainability.
Reasonably high catering lease
Have you found an offer that you like but seems very expensive? Some restaurants or hotels for lease appear to have a very high lease rate at first glance; But if you look closely, there are often good reasons that justify this price. Is the demand particularly high because the clientele may be particularly well-funded? Does the gastronomy have a unique peculiarity that no other restaurant, hotel or inn can offer anywhere else? Rarity value, uniqueness, monopoly position or conceptual orientation towards a recurring, very well-off clientele, for example, are reflected in the amount of the lease.
If, for example, a hotel in Munich is to be leased that specializes in Arab guests who regularly spend the summer in the Bavarian capital, this guarantee of success is priced in through tailor-made specialization. This often begins with the furnishings, the culinary offerings in the hotel restaurant and maybe even the specially trained staff.
Important before the lease
What do future tenants have to consider before signing the lease? So that you can assess the profitability of the business, you should ask the previous lessee to look into his profit and loss accounts. Also look into the question of why he is leaving. Also check whether there are any special requirements at the location or property that could limit your operation. When negotiating, potential catering tenants should pay attention to the following:
The question also arises as to whether the location is even suitable for the planned concept: Are there any location-related or property-related requirements that restrict business operations? When negotiating the contract itself, special attention should be paid to a few other points.
Check whether all parts of the contract are clearly regulated, especially the lease property with all associated areas, e.g. warehouse, garage including the lease purpose, lease period (limited / unlimited, with / without the option to extend) and rent. There are different variants of rent: fixed lease, turnover lease, graduated lease and indexed lease. Make sure that all parts of the contract are described, delimited and declared comprehensively and in detail. Also make sure that the planned type of use is contractually guaranteed. Check the amount and conditions of all costs such as rent, ancillary costs, deposit, etc. How are the contract duration, option rights and termination regulated? How is subsequent or sub-lease regulated, as well as repairs and maintenance? All of these questions must be answered clearly and competently before the lessee signs the catering lease.
How high is the broker's commission?
Potential tenants often turn to hospitality real estate agents because the process is complex. The reasons are obvious: Brokers have the best market overview of available catering establishments, can estimate the appropriate lease rate and - if necessary - help with contractual preparations. So they not only help with the search, but also with the analysis, pricing and negotiations. A commission is usually due for this. How high is the broker's commission? It can be negotiated relatively freely within the legal limits. Usually the market situation, price / turnover or another property-related value play a role as a reference. If a property is in high demand, prospective tenants should calculate with 2 - 3 monthly rents (net, cold, plus VAT).
Tip: Talk to real estate agents for gastronomy real estate directly and ask about the conditions. In a personal conversation you will find out where he can support you. Maybe he already has an object in the database that fits your search profile perfectly!