Site selection secrets for restaurant tenants

Site selection secrets for restaurant tenants

By Jeff Grandfield and Dale Willerton, The Lease Coach


As we speak, throughout North America, we routinely advise our audiences of the importance of proper site selection. The commercial space chosen by a restaurant tenant can be a deciding factor in the success or failure of the business.

Based on our many years coaching and consulting to independent and franchise tenants, here are just a few tips for viewing available commercial space for lease and considering before signing on the dotted line:

Location within the location — Where is the commercial unit situated within the shopping plaza? Would you be leasing inside the plaza/mall or on the pad outside? Would you be located at the end of an abandoned corridor or within the busy food court?

Accessibility — How easily can your customers access your new business? Are there stairs leading to your front door? If so, elderly customers may have difficulty getting to your door. If there is an elevator, when was it last serviced? Can drivers easily turn in to your business' parking lot or do they have to cross in front of oncoming traffic

Visibility — Can your business be seen from the street? Or, are there trees or other buildings blocking the view? Visibility by both drive-by and walk-by traffic is ideal.

Parking — This is another one of the key issues to evaluate prior to signing your first lease. In our own experience, we have seen parking to be a highly contentious issue and one of the most difficult things to correct after the lease has been signed. Typically, there are only so many parking spaces assigned and, once they are taken, they are gone. Negotiate for plenty of parking spots – so that you, your staff and your customers all have a place to leave vehicles. Consider where those parking spaces are located as well; those closer to your business door can be preferable. Consider negotiating for a "reserved" spot located directly in front of your restaurant door where your delivery driver can park.

Signage — What signage is available to you? What type of signage is this? Where is it located?  Where would your business name be placed on a common pylon sign shared by other tenants? Would you, as a commercial tenant, be charged for any additional signage requested? Negotiate now for "grand opening" signage (e.g. banners and/or pull-away signs).

Neighboring tenants — Ascertain who is doing business directly next door to you. Will this tenant be conducive or detrimental to your business? While asking the landlord/landlord's agent about these neighboring tenants, it can be a good idea to meet and quiz these tenants. Be friendly and polite and introduce yourself as a prospective new tenant. With representing new tenants, The Lease Coach frequently asks pointed questions. What you learn may very well surprise you!

Anchor tenants — These are the major businesses/retailers that pull customer traffic to a property. Typically, they are major grocery or department stores; however, this is not always the case. Consider the stability of those anchors. How long have they remained in the property? Are they planning to remain or move? We well remember how many tenants leasing in a small shopping plaza near one of our homes were caught off-guard when the major grocery store anchor moved out. Major grocery chains frequently continue to pay rent on a vacant commercial space to avoid having a competitor moving in.

Broker: friend or foe? — It is not uncommon for a commercial tenant to believe that the agent or broker is working for them. However, it should be noted that the listing agent's commission is being paid by the landlord, and even an outside agent may be sharing in that commission. Remember, the higher the rent often the higher the agent's commission. Whether a landlord-paid agent can represent two masters you will have to decide for yourself. Brokers and agents do a great job, but who are they doing the job for and who is paying them to do it? Even the most altruistic agent can't serve two masters equally.

We have helped many new and existing restaurant tenants negotiate first-time leases and lease renewals as well as choose the most appropriate business location. A good business in a poor location ultimately becomes a poor business.

There is much more to site selection than meets the eye. The best location is critical for your new or existing restaurant business, but don't just stop there!


Dale Willerton and Jeff Grandfield — The Lease Coach are commercial lease consultants who work exclusively for tenants.


Topics: Business Strategy and Profitability, Customer Service / Experience, Food & Beverage, Legal Issues, Operations Management, Restaurant Design / Layout

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