Thinking your foodservice establishment could use a little extra money every month? Maybe you’re looking for a financial boost for remodeling or investing in new restaurant equipment and supplies. It’s not unreasonable to look to a lease renegotiation with your landlord as the answer. There is a broad spectrum of reasons for re-evaluating your lease, including financial distress, property remodeling, or just looking to extend your current agreement. Lease renegotiation is more common now than in the past, and it’s possible for smaller chains and independent facilities. Right now, landlords are more willing to be flexible considering the low interest rates for refinancing and the attractiveness of property upgrades to other potential tenants. Here are five tips for successfully renegotiating your lease:
- Review your lease, the marketplace and competition for similar tenants and stores. What are others paying in the same market for similar space? Is there competition in the same center or lots of vacancies?
- Be willing to share your financials with the landlord, especially if you’re asking for help because you’re struggling.
- Be confident with your redevelopment plans—structurally, operationally and through marketing—before asking the landlord to participate. There’s nothing that will strain a relationship more than to throw good money after existing problems and not change anything.
- Hire a professional to help. You’ve already got a full-time job running your restaurant, bar, or cafe and having a third-party in the middle creates a sense of urgency and importance.
- Come with an open mind and be willing to give something up. Both parties have to feel like they are getting some benefits from the new deal.