July 14, 2014 |

Relocation: On The Move

By Jeffrey Freehof

When considering moving your restaurant from one location to another, there’s a lot at stake. As the owner of an established Italian restaurant here in Georgia, we wanted to make the right decision for both our business and our customers. Questions to ask yourself before moving:

  • Have you outgrown your existing space?
  • Is your rent headed so high that your business can’t even afford it?
  • Do you have a better opportunity in a nicer space?
  • Is your landlord easy to work with?
  • Has business declined and it’s time to downsize?

These are just a handful of reasons why operators consider relocating their business.

Of course, with any deal, there’s a catch: the above questions are all the very reasons why some operators have moved and gone out of business, while others have had great success. I moved my 100- seat Italian eatery just a half-mile away into a slightly bigger space which added 35 seats, a bar area and dining room space that can be sectioned off for private parties.

Originally, when I started looking at available spaces we found one we liked, but it was four miles away. I knew we’d lose some of the customers that we worked so hard to win over. The space was also too raw and needed many costly renovations. We shopped around. The process I went through was extensive and honestly exhausting, but ultimately brought me to the best decision I could have made for my business.

The most important thing you’ve got to do when considering moving your operation is to be very organized and thorough in your research. Create a list of all things to be considered.

The space in which I had built my business worked well for us for five years and I knew it would actually be easier to stay where we were, especially since we had built a great clientele. Remember that easier is not always better! But, we were at the end of our lease and it was time to renew. For some reason the landlord wanted to hike the rent so high that my company would not have been able to afford it. That’s when I knew I needed to start looking at other spaces while at the same time attempting to negotiate a lower rent structure to try and stay put.

This process can take eight to 10 months or longer. Don’t think you can make a last-minute decision down to wire at the end of your lease. If you wait too long, you could be locked into signing a long-term lease somewhere you don’t really want to be or worse –– have no lease at all to operate your restaurant.

I think it’s to your advantage to let all parties know that you are looking at several locations, so you’ll get the best possible rent structure available. I was planning on moving all my furnishings and equipment as well as my hood and exhaust system and walk-in cooler, and it was necessary to get quotes from several companies to do the big work. It’s critical to create a timeline for a big move. If you don’t, the project can take so much longer than you anticipated — which will in turn cost you lost revenue. You can’t move everything overnight, and you’ve got to understand –– and plan for –– the costs associated with moving. The next step is to weigh out how long it will take you to recuperate the investment. Also understand that even if you estimate your moving expense, more than likely, unexpected expenses will arise.

I was very thorough and estimated on the high side that it would cost $15,000 to move into a very nice existing restaurant space. Due to unforeseen issues, the move with improvements to the new space had a $10,000 overrun. This could potentially break somebody in the process of moving and prevent them from even being able to open due to lack of funds. Be careful.

When looking at other locations, here are some incredibly important things to consider, especially if you’ll be moving all your equipment to the new location like I did:

Have an electrician look at your current electrical situation and make sure the new location can handle your electrical load. One problem I ran into with cost overruns was that my old location had three-phase power coming into the space and my steam table, walk-in cooler compressor along with my exhaust and make-up air motors all ran on that. The new space didn’t have it, and it was cost prohibitive to add it. So I replaced the compressor, the motors and my steam table to work with the one-phase power coming into the new space.

You also want your plumber and an HVAC team to check out the new space to see what might be needed to retrofit your equipment and to ensure all things are in good working order.

It is critical to have the board of health, building inspectors and the fire marshal come before you sign a lease to let you know of any potential expenses that need to be taken into consideration. I’ve seen folks sign a lease and then find out they need to upgrade the grease trap. In my county, they are enforcing $15,000 to $20,000 grease traps that need to be installed. That’s definitely not something you want to find out after your money has all been spent on other upgrades.

You need to measure the space accurately and lay out on paper the existing equipment you have and where everything will go. Creating timelines, getting quotes and understanding all that you need to do, including new licenses to operate if applicable, will give you the smooth transition you need. You’ve got to consider your lost revenue while closed and extra advertising dollars you’ll need to spend to inform the community of your new location.

We opened our new location exactly one week after we closed the old. Within 10 weeks of re-opening, we had a 44.3-percent increase in sales, and being just a half-mile from our old location has aided in our success.

Jeff Freehof owns The Garlic Clove in Evans, Georgia. He is a frequent contributor to Pizza Today and a speaker at the Pizza Expo family of trade shows.