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Plan, Research, And Calculate Before Rent A Restaurant Space

By Sumaiya Simran Last Updated -- Thursday, 2021-12-30
Rent A Restaurant Space

Searching and renting a restaurant space is one of the most challenging steps for a restaurant owner. Renting a restaurant space is quite a troublesome part because a lot of factors such as size, restaurant interior, being able to tackle a bulk customer, etc., are dependent on the restaurant space. 

On the other hand, there is no shame in renting a space for your restaurant, and most of the popular restaurant brands too rent space or take a lease for 2 to 3 years. As restaurant space is dependent on the restaurant location, similarly restaurant rent is also dependent on the restaurant space.

Besides, rental restaurant space has several advantages. You don’t have to pay taxes or any kind of building maintenance fee, start a restaurant with a low start-up cost, and easily shift to a better restaurant space. 

Why Is It Necessary To Rent A Restaurant Space?

Of course, restaurant space is crucial for all and every kind of restaurant business. It’s indispensable to construct your restaurant; unless you run a transportable food cart business. This restaurant space is a geographical location where you’re going to place or start your restaurant business. 

Besides, customers will also remember your restaurant through the geographical location; the location will also be renowned by your brand recognition. Restaurant space is hugely dependent on restaurant location. 

And searching for the perfect rental restaurant space is a tough part of this restaurant business. And depending on the size and measurement of the restaurant space, a restaurant owner also has to plan the restaurant’s interior design. 

On the other hand, it’s also hypothetically true that your restaurant space depends on the restaurant concept, theme, interior, or culinary you planned.  

How Much Space Do I Need For A Restaurant Business?

Yes, it’s for sure that the rental price range varies depending on the location and size of the space you choose for your restaurant.

space need for a restaurant-business

In addition, it also depends on the “concept of the restaurant” because the “restaurant concept” can give you estimated square feet; you are gonna need for your restaurant, and then you can start searching for the perfect restaurant space. 

Here is some general estimated square foot you’re gonna need for your restaurant:

  • Fine Dining Chinese Restaurant: 18 to 20 square feet 
  • Fast Food Chain Restaurant: 11 to 14 square feet 
  • Counter Service: 18 to 20 square feet 
  • Banquet Dining Service: 10 to 11 square feet
  • Hotel, pub, or club service: 15 to 18 square feet

How Much Does It Cost to Rent a Restaurant Space!!

There is no fixed amount of how much it costs to rent a restaurant space, as the cost for the restaurant space totally varies depending on the location, size, and measurement of the restaurant space.  

One of the reliable secondary sources is Restaurant, which has done primary research on “ how much does it cost to rent a restaurant space”; considering “restaurant owners’ ” the prime respondent of the survey. 

Here Are Some Significant Findings From That Primary Research:

how much does it cost to rent restaurant space

Source: a survey on restaurant occupancy cost 

In the image above, we can see that on average monthly rent for restaurant space is $6,914, and this amount can hugely vary based on the location per square footage of the restaurant business. On the other hand, some of the sources also suggested that some locations charge $100-$500 per hour

In addition, coffee shops or cafes tend to require smaller space and need a lower rental budget range. In vice versa, the restaurant which follows fine dine-in concepts requires a larger space, as a result, needs a higher budget to operate the fine-dine restaurant. 

Prerequisite Brainstorm Before Rent A Restaurant Space

 I must say if you’re a new restaurant entrepreneur, renting a restaurant space can save 40%-60% of your start-up capital; hence you can invest that amount in some other aspects of your restaurant business. 

In addition, for your information, let me inform you; renting a restaurant space has many advantages. For instance, you don't have to worry about any installation or mortgage, tax or building maintenance, etc. And by any chance, if you’re having a problem with the space or with the landlord, or you’re not making enough profit, then you can easily change the location. 

Hence some Prerequisite factors need to be followed and searched before you rent a restaurant space. 

1. Market Research: Rental Of Restaurant Space 

Market research has always been needed in every aspect of your plan, so as needed before renting a space for your restaurant. Well, it’s true indeed that research takes time, but it’s totally worth it. 

Market research or plan on this perspective won’t be only finite on searching for the perfect space and executing the mission of booking that space with advance payment. 

Research is essential before renting a restaurant space because it unfolds some micro factors too, for instance:

  • Research On The Neighbor Competitors
  • Which Restaurant Concepts In Your Chosen Location Have More Crowds? 
  • The Income Range Of The Neighborhood
  • Analysis of the geographical location 
  • The Potential Customer/ Their Buying Behavior
  • Analysis, The Close Competitors
  • How visible your restaurant has been from outside
  • The draining, garbage, and eclectic system of the build or the space you desire to rent 

2. Choose The Right Location: Higher visibility Of Your Restaurant. 
Right restaurant space comes from the right location because the right location can bring correct visibility. As I have mentioned above, the rental price range depends on the restaurant space per square foot and geographical location. 

Besides, the rental price of the restaurant space depends on the location, such as, is the location on the prime location (more crowd, better chance of exposure) or narrow street (low chance or no exposure). Therefore we can state that the higher the crowd, the higher the sales, and the lower the crowd, the less the chance of a sale.

Highing up the visibility also proved to be a free marketing stunt for your restaurant business. Hence it would be profitable for you if you choose or rent the prime location for your restaurant. Furthermore, you can hang a signage board outside the restaurant or at the parking lot. 

Essential Factors To Consider While Renting A Restaurant Space

factors to consider while renting a restaurant space

Now, I’m going to elaborate on some significant factors to think about while renting a restaurant space. I have searched a lot of secondary sources and picked out some crucial components to analyze and make you aware. Hence before or while renting a restaurant space, you can checklist all these categories: 

1. Stick To Your Budget: Restaurant Space Budget 

You might think, “how difficult is it to stick with the budget?”, but unfortunately when you practically go or do your secondary research for searching the perfect space for your restaurant, you will realize “how difficult it is to stick to your budget!!”.

Because it’s very hard + depends on your luck to get such a kind of restaurant space; which’s rental price will match with your budget and also at the same time fulfill your desire, want and demand you planned for your restaurant. 

Moreover, there’s also some logical explanation too on “why you should strongly stick to the budget?”. The logical reason is; if you exceed your budget limit at the very first step of starting your business, it might be difficult or challenging for you to pull off the return on investment from the market. 

Hence it is better to stick with the budget you have planned for renting the restaurant space, no matter what face value the landlord asked for!! 

2. Background Check: Restaurant Owner And Space

After you have found your desired restaurant space and cleared your advance payments, it’s wise to talk to the landlord and try to understand his/her psychology, personality, communication style, and observe the behavior towards you or others. 

Background checking is important for both the restaurant's space and the landlords; because it might cause trouble later or in the long term. For more queries, you can also talk with other tenants of that landlord to know about the landlord’s past behavior and experience of tenants.

Furthermore, don’t forget to check the history of that restaurant space you have chosen. If the space has some serious history, such as murder or criminal occurrence, paranormal activity used to happen. A particular portion of people will hesitate to come to the restaurant. Hence you might face serious loss or struggle to run your restaurant business. 

3. Shape And Size Matter: Rent Based On Your Concept 

Indeed, the shape and size of your restaurant are very important because you can plan your restaurant floor plan depending on that. 

The restaurant floor plan describes the size that will occupy the different departments of the restaurant. For instance, space for the bathroom, kitchen, billing & ordering, dine-in area, and waiting area, etc. 

And, if you wanna interior your own restaurant, that's ok. Nonetheless, it’s better to hire a restaurant interior designer; if you wanna make a better efficiency or usage of the restaurant space. 

The outcome of making better utilization of restaurant space: 

  • Efficiency in workflow
  • Better placement of the kitchen equipment  
  • Stick to budget 
  • Better usage for small space
  • Separate room for training your staff

4. Negotiate For Your Best Price: Rent Price Is Never Fixed 

Much research has suggested that the rental price for restaurant space is never fixed. Whether it deteriorates or increases as time passes, the rental price of shop or restaurant space depends on the size, location, crowd, and popularity of that space. 

Negotiating with your landlords is not a bad thing, in fact, a negotiation strategy helps you to stick to your budget. Here are some smart negotiating tactics for you

  • Hold the advance rental payment until the restaurant is ready for business
  • Pay a minimal rental free at the initial year, and gradually increase the rents
  • Don’t sign for a long-term tenancy agreement because you don’t know about your future

5. Duration Of the Rent: For At Least 2 to 3 Years

You might think; going with a long-term contract agreement with your landlord does gain trust and enhance a relationship with the landlord, but unfortunately, it would be a wrong decision for your business. 

Therefore it’s better to not exceed your lease contract for more than 2 to 3 years because there is a high chance that new restaurant brands would fail to reach the target profit range in the initial years. And if everything goes well, the restaurant owner still has the opportunity to shift into a bigger space. 

Besides, while signing the rental contract agreement, you should carefully study the contract paper and carefully understand the provision of starting and ending periods.  

6. Complimentary Facilities: Include With The Rental Cost 

 Another necessary factor you need to checklist while renting a restaurant space is negotiating and confirming all the complimentary facilities included within the rental cost. 

Complimentary facilities with rental costs such as; regular trash removal, drainage cleaning, sweeping, building repair, necessary renovation, pest control, general maintenance or elevator maintenance, necessary service charge, etc. Also, ask for the essential insurance document of rental space, which will be needed in case of any fire occurrence, etc. 

!!Save Your Capital!!

95% Of The Commercial Space Are Available For Rental But Not For Sale

Some secondary sources have suggested that; almost 95% of landlords don’t allow for the sale but are only available for rental service. 

Booking a space for a restaurant also conveys that you are free from many crucial responsibilities, such as building maintenance, mortgage, repair, etc. 

Another advantage of renting a restaurant space rather than purchasing it is that, if by any chance you’re facing loss, you can easily close your restaurant and leave that space. 

Let’s Get Introduce With Digital Restaurant Space 

Digital rental space for restaurants conveys restaurant management software. Because when we start a restaurant business, we often need many micro aspects to operate it, such as staff, inventory, suppliers, kitchen, waiters, menu, billing, fast service, customer satisfaction, sales, and other miscellaneous. 

But most of the time, we manage all these factors manually just because of lack of technological knowledge or stay with the misconception that we might need higher coding knowledge to operate an advanced Restaurant billing & management software. 

Bhojon-Restaurant Management Software is the best software for restaurant management and smooth billing. 

Choose your desiring hosting platform and simply install the restaurant management software to run your restaurant business smoothly. 

Restaurant Management Software

Bhojon-Restaurant Management Software


Indeed, the restaurant industry is a competitive market, and hard to survive to a longer life span. 

Therefore renting a restaurant space for a short time is a relieving opportunity for many new restaurant owners; because they can leave the space if they face loss.

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