If you’re planning on opening your own restaurant and have begun researching commercial listings in your area, you may have noticed that some businesses and properties are listed as for sale and others as for lease.
In the world of residential real estate, the difference between these two categories is generally quite straightforward. However, in the restaurant industry, it can be a little less black and white.
So what’s the difference between restaurants that are for sale and those that are for lease?
To clear up some of the confusion, let’s take a closer look at what’s included in a restaurant purchase, what leasing entails, and how it differs for franchisees.
Looking for more restaurant start-up resources? We’ve carved up some helpful tips on our blog. Check it out.
- What to Look For When Choosing Restaurant Space
- How to Find a Restaurant For Sale in Toronto
- The Essential Restaurant Start-up Checklist
Unpacking Restaurant Leases
In the context of owning and operating a restaurant, the term “lease” can actually have a variety of connotations. Depending on your unique business goals, what’s included in your lease will vary.
With that in mind, let’s look at two common examples in which restaurateurs will have a “lease” when operating their own business.
Purchasing an Existing Restaurant
For many entrepreneurs, purchasing an existing restaurant and operating it as-is (or converting it into a new brand) makes for a strong pathway into the industry. However, when you buy a restaurant, you’re not always purchasing the building it sits in.
While your purchase will be inclusive of plenty of other assets such as the brand, furnishings, kitchen equipment, etc., you may still need to lease the space where the restaurant is currently located. In most cases, this involves taking over the lease from the existing tenant.
Looking to buy a restaurant that includes property? Click here to explore our real estate-inclusive business listings.
Leasing a Vacant Commercial Space
Another route to restaurant ownership involves building your business from the ground up. In these cases, the onus is on you to find and acquire the right space for your restaurant. When you stumble on the perfect commercial space for your vision, you’ll then sign a lease which grants you permission to use it.
Special Factors For Franchises
Franchises are another popular pathway for entrepreneurs. While they follow a distinct model of business, franchises are fairly similar to independent restaurants when it comes to unpacking leases.
As a potential franchisee, you will have the opportunity to purchase an existing location (not including property) or find an available for-lease space to open up your business. However, in addition to these methods of ownership, opportunities to lease (rather than completely purchase) a franchise location do become available from time to time.
These types of for lease listings provide turn-key potential for restaurateurs of all goals and backgrounds as they often include leasehold assets and equipment.
Dreaming of opening your own restaurant? Check out these posts for a crash course on restaurant real estate.
- A Guide to Vetting Investors For Your Business
- The Case for Converting an Existing Restaurant Rather Than Building Your Own
- Finding the Next Great Neighbourhood Spot
Breaking Into The Biz
Restaurants are a specialized category within the already nuanced world of commercial real estate. Regardless of what you’re looking to accomplish, partnering with a dedicated restaurant real estate agent can be an absolute game-changer for your entrepreneurial journey.
After helping you figure out which path to restaurant operations suits you best, they’ll scour the market to find your future business. A well-connected restaurant agent can ven help you access private, unlisted, or off-market opportunities.
On top of helping you track down (and land) the best place to bring your vision to life, they’ll ensure you’re up to speed on what’s included in your lease or purchase agreement. While there’s a lot of fine print to navigate in a commercial real estate transaction, an experienced and specialized agent can help you make heads or tails of it. Whatever you need to know, they’ll keep you informed.
Ready to find the perfect spot for your restaurant? As commercial real estate experts, we can help. Click here to send us an email.
