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Starting a new restaurant, whether it’s your first or fourth, is certainly no small task. Deciding whether to buy or lease restaurant space is one of the first decisions you will have to make before beginning your exciting venture. Understanding the risks and advantages of buying and leasing restaurant space will help you make the best decision for your restaurant business!

Leasing vs. Buying a Restaurant

Buying a restaurant location is a steep investment and a long-term commitment. While the investment might be worth it in the long run, the purchasing and renovation process may require a lot of time and money, depending on the condition and layout of the space. Someone who has been in the restaurant industry with a reputable track record may consider this option if they find an ideal location and have the capital.

Leasing a restaurant space offers restaurant owners a number of advantages, given the nature of risk in the restaurant industry. A short-term lease gives restaurant owners a cushion to fall on if their business fails or outgrows a space. In addition, an empty restaurant space for lease typically already has a commercial kitchen and bar, dining room space and equipment. Leasing an already-equipped restaurant space can significantly reduce start-up costs and save you time and energy. Leasing also gives you more flexibility to spend your startup capital on payroll, menu development and marketing.

Another advantage of leasing restaurant space is ideal location. When buying a space for your restaurant business, you may end up sacrificing your desired location because many prime locations are available solely for lease. You’ll also have more time to dedicate to your restaurant, customers and staff without having to worry about the maintenance and repairs that your commercial landlord will handle for you.

Deciding to Lease or Buy

Is it better to buy or lease a restaurant? Well, it’s not always a clear-cut decision. Your decision should depend on your unique business situation and long-term goals! Before deciding to lease or buy your restaurant, be sure to consider the essential factors, including your budget, target market, location, renovation costs and future growth.

While buying a space may give you the opportunity to build equity, there are many risks involved to consider. If you’re just establishing your restaurant or are under a few years old, leasing might be the best option for you until you build a loyal customer base and a stable cash flow.

Are you deciding whether or not you want to lease space for your restaurant business?  Talk to our leasing professionals today!