Before you sign: how to tell if a space can really become a restaurant

A site walk and three documents answer most of it

You can tell whether a space will work for a restaurant by checking five things before you sign: what kitchen infrastructure is already there, whether a hood can be vented through the roof, whether the power, gas and water are large enough, where grease waste will go, and whether the city will let you operate a restaurant at that address. A site walk with a builder, the landlord's drawings and the lease work letter answer most of it. What you cannot confirm before signing, you should protect with time to verify in the lease.

At Harrison Construction we build restaurants, from inline tenant finish-outs to freestanding buildings, and some of the most valuable work we do happens before there is a project at all. I have walked spaces with operators who were ready to sign and found that the cheap rent came with a missing grease line, a roof that could not take a new unit, or an electrical service a fraction of what the kitchen needed. None of those things are visible from the parking lot. All of them are visible to someone who knows where to look.

Has it been a restaurant before, and what did the last one leave?

A second-generation restaurant space, one that has housed a restaurant before, can save a great deal of money and time. The questions are what was left behind and whether it still works. A hood, a grease interceptor, floor drains, a walk-in cooler and gas service are valuable only if they meet current code, suit your menu and sit roughly where your kitchen layout needs them.

Ask the landlord for any drawings, permits and equipment information from the previous tenant, and ask why that tenant left. Look for the age and condition of the hood and its fire suppression system, the size and location of the interceptor, and whether equipment that looks included actually belongs to the landlord or was left behind by a tenant who may still claim it. Do not assume that because a restaurant operated there last year, your restaurant can open there next month without a plan review. Cities generally review food establishment plans again when a space changes hands or is remodeled. Fort Worth, for example, requires plans to be submitted for new construction, extensive remodels, a change of ownership or a conversion of an existing structure, before the work begins.

Can the kitchen vent through the roof?

A cooking line needs an exhaust hood, and the hood needs a duct path to the roof and enough make-up air to replace what it pulls out. In a single-story inline space, that path may be short and simple. In a space with a tenant or office above, or with the kitchen planned far from any exterior wall, it can mean long duct runs, fire-rated shafts and structural work.

Look up at the roof, literally. Ask whether the roof structure can carry a new exhaust fan and rooftop HVAC units, whether the landlord allows new roof penetrations and who must perform them to keep the roof warranty valid. Ask where the existing units are and how old they are. A kitchen generates far more heat than a retail store, and a space built for retail often needs more cooling capacity than its current rooftop equipment provides.

Think about the neighbors as well. Exhaust that discharges near a neighboring tenant's air intake, a residential window or a patio can become a problem with the landlord or the city later. A builder who has installed hoods in centers like the one you are considering will usually spot an awkward exhaust location on the first walk, while there is still time to negotiate a different unit or a different layout.

Is there enough power, gas and water?

Utility capacity is the item I see underestimated most often. A restaurant kitchen draws far more electricity than a typical retail space, and a fryer, oven or range line may need natural gas the space does not have. Water and sewer lines sized for a small shop may not serve a dish machine, a three-compartment sink, hand sinks and restrooms all at once.

Upgrades are possible, but they take time and coordination with utility providers, and the timing is not entirely in your contractor's control. Find the electrical panel and look at its size, find the gas meter if there is one, and ask the landlord in writing what service capacity is delivered to the space. An electrician or a builder can tell you quickly whether the numbers fit your equipment list.

• Electrical service size compared with your equipment load
• Gas service and meter capacity, if your menu needs gas
• Water line size and water heater space
• Sewer line depth and location relative to the kitchen
• Rooftop HVAC capacity for a hot kitchen

Bring a builder to the site walk

Brokers know rents, terms and markets. Architects know design and code. A contractor who builds restaurants knows what it costs to make a particular space work, and that is the number that changes a good deal into a bad one. Walking two or three candidate spaces with a builder before you choose one can tell you which space is genuinely cheaper once the kitchen is inside it.

We do this as part of our due diligence and conceptual estimating. The goal is not a final price, which needs drawings, but an honest read on which space carries the most risk, what the big-ticket items will be, and how long the build is likely to take. I explain how those items add up in my guide to what actually drives the cost of a restaurant build-out.

Where will the grease go?

Restaurants that produce grease generally need a grease interceptor, and it is one of the most disruptive items to add after the fact. If the space does not have one, someone has to find room for it, often outside the building or under the slab, and connect your kitchen drains to it. That can mean cutting and trenching the floor across much of the unit and coordinating with the landlord and the city.

If the space does have an interceptor, find out whether it serves only your unit or is shared with neighbors, whether it is large enough for your concept, and who maintains it. In a shopping center, the answers are usually in the lease or the landlord's tenant criteria. Ask for them before you sign, not after the plumber finds the problem.

Will the city let you open a restaurant at this address?

A space being empty does not mean it is approved for your use. Most cities require a certificate of occupancy for the specific business in the space. Dallas, for example, requires a new certificate of occupancy for a first use, a change of use, a change of tenant on an existing certificate or a change in floor area, and a change of use may require site plans, floor plans and possibly a parking analysis. Fort Worth states that any building used or occupied in the city must have a certificate of occupancy, and that a shell building will not receive one until a separate tenant finish-out permit is completed.

Converting a retail space into a restaurant is a change of use, and restaurants can bring extra review for parking, occupancy and health requirements. Ask your broker or the city early whether the property's zoning and parking allow a restaurant. I walk through the full approval sequence, from building permit to opening, in the approvals a restaurant build-out needs.

Read the lease like a builder would

The work letter is the part of the lease that matters most to construction. It defines what the landlord delivers, the condition of the space on delivery, the tenant improvement allowance and how it is paid, the deadlines for plan approval and completion, and when rent begins. A delivery date that slips, an allowance paid only after you open, or a rent start date tied to a fixed calendar date rather than to your permit can each change the economics of the deal.

Ask the landlord the questions below in writing, and have your broker and a real estate attorney review the answers before you sign. If you are weighing whether to renew, relocate or expand into a new space at all, Julie Smith's guide on deciding to renew, move or buy when a lease no longer fits is a good place to frame that decision first. Where you cannot confirm something before signing, ask for time in the lease to verify it, such as a contingency for permit approval or a due diligence period.

• What exactly is delivered, and in what condition?
• How much is the allowance, and when is it paid?
• Are roof penetrations allowed, and who must perform them?
• What utility capacity is delivered to the space?
• Is there a grease interceptor, and is it shared?
• When does rent start, and is it tied to permit or opening?
• What equipment left by the prior tenant is included?

What a pre-lease review with us looks like

Send us the address, the letter of intent or draft lease, any drawings the landlord has and a rough idea of your concept and equipment. We walk the space, look at the roof, utilities and existing kitchen infrastructure, and tell you plainly what we see: the items that will drive cost, the ones that will drive schedule, and the questions that still need an answer from the landlord or the city.

If you are comparing more than one space in Dallas–Fort Worth, we can review each one the same way so you are comparing total cost of opening rather than just rent. And if the honest answer is that a space will not work for your concept, we would rather tell you before you sign than build it for you afterward.

Questions people ask me