Leasing food premises for your food business can be a good option if you don’t have the capital to purchase a property outright.
RECIPE FOR SUCCESS INGREDIENT CARD
Ingredient 1
Business – Law
Question:
What to consider when leasing food premises?
Answer:
Leasing food premises for your food business can be a good option if you don’t have the capital to purchase a property outright or if you want the flexibility to move locations in the future. Here are some key considerations to keep in mind when leasing premises:
Lease term:
When negotiating a lease, it’s important to carefully consider the lease term. Longer lease terms may provide more stability for your business, but they can also be more difficult to get out of if circumstances change. Shorter lease terms can provide more flexibility, but they may come with higher rental rates.
Rent and rent increases:
Be sure to understand the rent structure and any potential rent increases over the course of the lease term. Negotiate for a fair rental rate that fits within your budget, and consider building in options for rent increases that are tied to inflation or other agreed-upon factors.
Maintenance and repairs:
Understand the responsibilities for maintenance and repairs under the lease agreement. Some landlords may take care of all maintenance and repairs, while others may require the tenant to handle certain repairs. Be sure to factor in these costs when budgeting for your business.
Permitted uses:
Check that the property is zoned for the type of business you plan to operate. Additionally, be sure to understand any restrictions on how the property can be used, such as limitations on outdoor seating or signage.
Security deposit:
Most landlords require a security deposit upfront to cover any potential damages or unpaid rent. Be sure to understand the amount of the security deposit and when it will be returned.
Location:
Choose a location that is accessible to your target market and that is in a well-trafficked area. Consider factors such as parking availability and proximity to public transportation.
When leasing premises for your food business, it’s important to carefully read and understand the terms of the lease agreement. Consider seeking the advice of a real estate attorney or other professional to help you negotiate favourable terms and protect your interests.
Action
Leasing your food premises
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