Amrita Bartram, a partner in Commercial Property Law at Girlings specialising in the hospitality sector, examines the practicalities and hidden costs.
Food and drink is big business in Kent and you just have to look around to see the increase in new restaurants, not just the chains but hungry new independents keen to get some of the action. However, if you are a sole trader who dreams of realising your romantic notions of opening your very own boutique restaurant, beware. There are hidden issues and costs relating to the premises which you must consider before taking them on.
Once you have signed up with the agents, scoped out the area and found premises, your business plan should ensure that turnover will exceed the monthly rent, rates, utilities and staffing costs or, at least, that you break even at the beginning. Try to negotiate a three to six months’ rent-free period at the start of the lease to give yourself a breather. This is especially important if you are fitting-out the premises and are unable to trade initially as you will not have an income!
If you are fitting-out, be clear that your proposed design, décor and frontage are achievable in your chosen premises. For example, is the property listed or within a conservation area? Check the planning use with the council and what venting/ducting needs to be installed to operate your business. If there are any meters or plant and machinery that you would like to access you may need to secure rights over the rest of the building.
You will need a premises licence if you want to offer alcohol and for selling food you will need to register with Environmental Health, so check at the outset that neither of these will present a problem.
If you want to increase your service area by placing tables outside your restaurant, you might need to apply to the council for a pavement licence. It is advisable to instruct a surveyor to check the structural integrity of the building if you are to pay service charge and to check that you will not be responsible for repairing what is already in a bad condition. Get a copy of the asbestos survey and fire risk assessment in advance as you want to be clear that you will not have to pay to obtain these in order to comply with regulations.
As to the lease itself, stamp duty, rent deposits and legal costs would need to be paid for upfront. It is important to remember that when renting space for your restaurant, a lease is a legal and binding document and careful consideration must be given to the finer details of what you will be liable for.