ATLANTA, GA (Oct. 8, 2012) – After riding out the lean years
of the recession, many restaurants are setting their sights on healthy growth.
The latest episode of “America’s Commercial Real Estate
Show” took an in-depth look at the restaurant industry, from leasing strategies
to menu makeovers. A panel of experts shared their insights and tips to help
restaurateurs navigate the latest challenges and succeed in this
ultra-competitive business that — at least for now — seems to be growing.
 |
| Pierre Panos |
“I see expansion,” said Tony Akly, president of
Restaurants Consulting Group Inc. “I think we will see 10 to 15 percent growth
every year in the segments of quick service and ‘casual fine-dining’ where the
average ticket is $50 to $60 per person.”
Pierre Panos, founder and CEO of QS America, said his
company is experiencing “very strong continued demand” and double-digit growth
in two of its concepts — Fresh To Order and Brookwood Grill. QS America also
owns more than 40 Papa John’s restaurants.
“I think that we will have relatively strong restaurant
growth for the next few years,” Panos said of the overall industry.
 |
| Robin Allen |
Robin Allen, executive editor of Nation's Restaurant
News, cited many expanding brands including Firehouse Subs, Caribou Coffee,
Yard House, Chick-fil-A, Smashburger and Five Guys.
But with expansion come challenges. From site selection and
leasing to labor costs and legal issues, the restaurant business is no
cakewalk.
Ackly, whose company specializes in restaurant
design,construction and consulting, says site selection remains hugely
important for restaurateurs. He says the main ingredients for success are
visibility, access, parking, demographics — and of course, the economics of the
leasing deal.
 |
| Jonathan Neville |
Once restaurateurs begin negotiating for their site, there
are even more factors to consider, says
Jonathan Neville, a partner at Arnall
Golden Gregory LLP who focuses on retail commercial real estate law.
One hot topic is tenant improvements. These are especially
important for restaurant tenants who often require many modifications to sites,
ranging from installing venting and grease trips to adding parking.
“Tenant improvements right now in restaurants are such an
important part of the deal,” Neville said. “It’s important that money gets into
the tenant’s hand.”
Neville advises restaurant tenants to make sure their
landlords’ requirements for tenant improvements to take place are manageable
and reasonable. Also, be sure the lease addresses what happens if the landlord
doesn’t keep his commitment to tenant improvements.
“You need a way to offset that against your future rent —
and not only just offset the amount of the improvement,” Neville said. “[There]
really needs to be the right to offset the tenant improvements coupled
withinterest at a rate that is really going to make it sting a little bit for
that landlord.”
When negotiating the lease, tenants also may want to ask for
a way to enforce such landlord responsibilities as paying for certain utilities
and making building repairs.
Restaurateurs might also request SNDA (subordination,
non-disturbance and attornment agreement) clauses in their leases. An SNDA
protects a tenant by ensuring the lender would honor the lease in the eventthat
the landlord goes into foreclosure.
The entire episode featuring the restaurant industry update
is available for download at
www.CREshow.com.
The next “America’s Commercial Real Estate Show” will be
available Oct. 11 and will focus on commercial real estate year-end tax
planning.
For More Information, Contact
Stephen Ursery
Wilbert News
Strategies LLC
404-965-5026
