What do you need to consider to maximise the chances of a new leasehold restaurant site flourishing? Kate Dowd reports
The leasehold restaurant market is a very competitive one. Location remains an important factor, although many operators are considering premises in less-popular areas due to the lack of available sites. However, when looking for the right site, the age-old agency advice remains true: do your homework.
Consider the demographics: not only the market, but also the type of individual you would like to attract to your establishment. Many off-pitch sites can create a buzz on their own without relying upon footfall from successful neighbours. These operations often have a loyal customer base and therefore footfall is not a factor when choosing a property.
Those with existing successful businesses tend to hold on to their properties and, if approached with a view to acquiring a site, demand high premiums to exit.
Often those looking to sell are not only cautious with regard to the effect of marketing on their business, but also, when selling a leasehold, vendors have to ensure that the purchasers are of sufficient covenant strength to satisfy their landlords’ requirements.
As the market narrows, it can be a struggle to find existing A3 (restaurant) sites and many operators have been looking at either unlicensed A4 (pubs and bars) or A1 (retail) sites and applying for a change of use. However, the Neighbourhood Planning Act 2017 received Royal Assent on 27 April 2017 and you now require planning permission to change the use of A4 licensed premises.
Kate Dowd is a senior negotiator at Fleurets