FIRST STEPS TO TAKE ON THE PROPERTY LADDER

First get yourself a solicitor who specialises in commercial property transactions for either renting or buying a property. Draw up a business plan and then get it approved by your bank.

If you are renting, prepare a good presentation pack to win the landlord’s approval. Use some graphics to inject that wow factor, particularly if the property is in London as that is expected in the capital. Out of town presentation doesn’t need to be as sophisticated, according to commercial property agents.

Do put in the presentation: the anticipated covers, the spend per head, if you intend to turn tables (i.e. the same table to be used several times at one sitting) and the proposed accounting.

Go through the Yellow Pages or buy a catering magazine such as Caterer and Hotelkeeper to see who the agents are in your area. Good agents will get to know you, the client, instead of a scattergun approach of introducing you to masses of properties that don’t suit your wishes. Be sure you make it clear to the agent what kind of property you are seeking. But be prepared to be flexible when viewing properties as you may surprise yourself.

First and foremost, however, there must be an excellent understanding of your market. This comes first before entering into any contract, despite the excitement of falling in love with a property. Do you fit into this area? Who will your customers be?

Renting the property

If renting a restaurant premises, measure the property yourself. The area given by estate agents or landlords could be less and the rent should therefore to be lowered. Negotiate a lower rent if taking out a long lease.

If the property needs repairs or major redecoration, ask for a rent-free period or discount until these are carried out.

Always get an agreement in writing for all dealings with landlords or estate agents, especially for any major alterations you would like to make to the property. Check on planning permission with your local council if putting up new signage or change of use of a property.

Buying leasehold or freehold

Find an architect whose practice deals in restaurant development. Get them to visit the property with you to discuss any alterations you may like to make and be guided by his or her expertise.

Check on planning permission with the your local council re change of use, signage and access to property via new doors, for example. Instruct a solicitor to act for you.

Discuss with environmental health officers basic requirements such as hand basins for staff, refrigeration, kitchen extractors, fire extinguishers (see page 66 for a fuller view of the EHO’s role and expectations).

Questions to ask

Before buying or renting an established restaurant ask:

• Is the area saturated with similar restaurants?
• Are the owners experiencing restaurant burnout or are there other reasons for the sale/change of lease?
• Is there local development which will adversely affect the area? Or, conversely, add to the customer potential?
• How old is the business and for how many years has it been profitable?
• What is the profit margin for the past few years?
• What percentage of repeat business is there?
• Do the books look accurate? Do the assets outweigh the liabilities?
• Ask your solicitor’s or bank manager’s advice.
• Have all renovations been undertaken with the necessary approval?

Leases: a brief guide

The average leasehold lease is 25 years with other leases at 20 or 15 years, but other leases can be negotiated with the landlord. A freehold lease’s finance changes only with the cost of borrowing.

• Landlords are looking for long-term investments and if the tenant has no track record, the landlord may ask for a rent deposit of a year in advance or a bank guarantee.
• However, the tenant may ask for a rent-free period if money is being spent on the property such as for rewiring, redecorating, new plumbing.
• The lease should be a full repairing and insuring one with five year rent reviews, the rent only increasing, never decreasing.
• The amount of rent increase can be calculated on profits or a comparable method of calculation.
• A break clause is advisable. This is a walk-away sum should the lease be broken.
• A sub-let clause should also be included.
• It is of course advisable to get professional advice with a lease.
• The shorter the lease, the less security there is for the restaurant and its borrowing power.
• A longer lease could be used as security against a loan as well as give a psychological feeling of security.
• Ask a tax advisor about setting off a large rent deposit against taxes as the period of non-profit making needs to be taken into account.
• Get the rent right as this is key to a successful restaurant.

The property and timing from viewing to signing a contract

From viewing to signing via legalities and licensing your property can vary from eight to 12 weeks depending on the complexities of the property and the availability of your finances. It can also be affected by your council’s efficiency.

If the restaurant is a shell and needs planning permission and licensing it may take three to five months. Change of use can take one month.

• Good communication is vital with all parties involved.

FRANCHISING A BUSINESS

The market for franchising a restaurant business is still within the fast food arena with the likes of Domino’s Pizza, Dunking Donuts and Baskin Robbins to choose from. Mid-market franchising has been considered by better quality companies but little has appeared to date. Franchising can apply to any type of restaurant.

The concept behind franchising is taking a proven format and, to replicate it, a franchisee invests in the setting up of the premises (McDonalds set-ups can be up to £250,000 to kit out one of their outlets) and shares the profits.

It is a very safe way of opening a restaurant if the spirit of being an entrepreneur doesn’t appeal. Customers come from day one as they know and like the product. Kentucky Fried Chicken is a case in point versus Bert’s Fried Chicken. Ninety-five per cent of franchises are profitable in year five.

But it is not for the work-shy. It takes extremely hard work, the franchisee is regularly checked and the rules of operation are very strict.

The trend towards franchising has slowed down quite dramatically, however, thanks to good employment during a stable economic cycle.

LOCAL GOVERNMENT AND YOUR BUSINESS

You need to establish a relationship with your local authority for planning permission, building regulations and any structural changes you wish to make to the property. Are you converting a property? Custom-building one? It is vital to get their advice and/or permission before embarking on any building.

• Get approval for change of use permission if converting a property.
• Consider consulting a professional to sort out the paperwork if the process is complicated – and for your sanity.
• If you wish to lodge a complaint against your local authority if you feel the handling of your application was badly undertaken, contact the authority first, then a higher authority if still dissatisfied. You may wish to discuss the possible steps with your solicitor or a professional planning consultant.

SCRUTINISING THE EXTERIOR AND INTERIOR OF A PROPERTY

View properties with a fine-tooth comb attitude. To help you to negotiate your price have a sound checklist and a list of items to discuss with builders for quotations:

• Are there cracks or any visible structural problems?
• Are the ceilings flaking? Any damp patches?
• Is the flooring, particularly in the kitchen areas, suitable and in good condition?
• Is there good drainage?
• Does the flooring slope, or have holes, is it uneven, are there changes of floor level?
• Are kitchen surfaces and equipment surfaces in sound condition?
• Is there adequate lighting or does new lighting have to be installed?
• Do stairs have hand rails?
• Are windows in good order? Check for rotting wood.
• Is the roof sound?
• Does the whole property need to be redecorated?
• Is there good ventilation?
• Is there an adequate supply of hot water and drinking water?
• Is appropriate fire safety installed?
• If equipment such as fridges and cookers are included in the deal, are they moveable to clean behind, in good working order, well maintained and clean?

KITCHEN LAYOUT

To provide a safe working environment, and to avoid cross contamination of food at all stages, the design of your kitchen and service areas is of great importance. Your layout should be built around the operation and not the other way around. Points to consider include:

• The same basic rules apply irrespective of size or scale of the establishment.
• An older building such as a seventeenth century cottage with a restaurant may not have the perfect layout. Take this into consideration when looking at properties and decide if the areas can be made to work – or not. Can staff in the working area carry work out safely?
• A logical flow of operation of delivery, storage, prepping, cooking, serving, disposal of waste, rubbish storage and collection with as many clearly designated areas for each stage of work is necessary to avoid cross contamination.

For example, a box is delivered and is put down on the counter where chicken is being prepared. Not only can the box have dirt on the bottom but it may now have picked up raw chicken bits. That box may be moved to another part of the kitchen and the cross contamination is now in its second stage.

The kitchen counter may also be contaminated from dirt on the box, the box perhaps having been put down on the pavement prior to being taken into the restaurant. All of this can be avoided if a logical flow – and common sense – is adhered to.

• Is space limited so that efficiency is impaired?
• Is cleaning difficult?
• Is there sufficient space for people to work at benches (counters to you and me) and other fixed equipment to allow other people to pass?
• The layout of cookers, ovens, fryers, refrigeration and other hot machinery with or without moving parts must be taken into account to avoid congestion.

Ventilation requirements

Good ventilation provides a comfortable working environment, reduces humidity, removes contaminated greasy air, steam and cooking smells. It also prevents condensation and will ultimately help on redecoration and maintenance.

Cost-cutting can result in high temperatures and humidity with increased risk of food poisoning. Good maintenance is essential to remain effective. External ducts require planning permission in most cases and need to be positioned carefully to avoid fallout with neighbours.

There are three main types of ventilation:

• 1.Natural ventilation: only suitable for small-scale operations, this system is seldom ideal as it relies on open windows and doors, is subject to weather whims and is least effective in hot weather. Mesh screening is necessary to keep out flying insects.
• 2.Extract only system: a simple, inexpensive technique which uses an extractor fan to draw out hot or stale air, cooking fumes and steam. Useful to ensure that cooking smells are prevented from spreading to other rooms.
• 3.Combined extract/inlet system: the most efficient system with the fullest control, it balances the flow of air in and out of the area. The design is based on a combination of ducting and fan exhausting the hot, damp and sometimes greasy air from the area with controllable replacement fresh air.

Hygiene facilities

Adequate water supply, wash basins, sinks, washing up equipment and good draining are of paramount importance in setting up your restaurant.

Water supply and drainage

Drinkable (also known as potable) water must be used to ensure food is not contaminated. In addition:

• Only drinkable water can be used to make ice cubes.
• Water from a storage tank or private water supply has to be monitored on a regular basis.
• In new premises, drinking water installation should be disinfected. Your local authority or architect can advise.
• Drainage facilities must be designed and constructed to avoid the risk of contamination of foodstuffs.
• All sink, wash basin and dishwasher pipes should discharge directly into the drainage system through a trapped gully to prevent foul odours.
• As this is a complex area with floor channels, deep seal gullies and sewers, do contact your local authority for further information.

Sinks and washing up equipment

Adequate facilities for food preparation, staff use, crockery, general cleaning and disinfecting of work tools and equipment all require a supply of hot and cold water, and must be easily cleanable and well sited.

• Lavatories must not be next to food handling space.
• Hand washing facilities must be provided in prep areas with hot and cold water and materials for cleaning hands.
• Sinks for washing food must be separate from hand washing sinks.
• Separate hand wash basins are recommended to be placed in each work and food service area including the bar, and preferably at the entrance of the kitchen.
• Stainless steel wash basins are strongly recommended but glazed ceramic basins are acceptable. Domestic sinks are not acceptable.
• Wash basins with foot, knee, ‘automatic operated’ taps or mixer taps are deemed a good idea but are not necessary.
• Position hand dryers carefully so that dirt and bacteria aren’t blown around food areas. As they are slow and inefficient, perhaps putting off frequent hand washing, disposable towels are your best bet.
• One or more commercial quality stainless steel sinks are recommended for the main sinks with one or more deep sinks for pot washing.
• In large catering premises separate sinks are required for each of the following: vegetables, salads, meat and fish.
• A dishwashing machine with a fitted water softener (for certain hard water areas) is recommended for all but the smallest of food premises. Commercial dishwashers take very little time in comparison to domestic dishwashers to operate and are designed with a simple interior and simple controls.
• A double sink with double stainless steel (never wooden) drainer is also recommended and may be used instead of a dishwasher but why be hard on yourself?
• The bar might have a glass washing machine and/or a sink (single/double) with double drainer.
• A separate sink for mops, buckets etc should be located outside the food area.

These are recommendations only. Take advice from your Environmental Health officer, particularly if you have small premises with little space.

Refuse storage

Even smart restaurants like Rick Stein’s Seafood Restaurant in Padstow have difficulties with rubbish due to lack of space outside. If you do have the space do position free standing bins well away from the view of diners as this can be very off-putting. Some restaurants don’t follow this aesthetically pleasing advice. If you want repeat business place bins strategically if possible.

• Don’t allow food waste and other refuse to accumulate in food rooms.
• Waste must be in closed, sound, easy to clean containers.
• Free-standing or wall mounted lidded holders for plastic bags should be provided, or a foot operated plastic lidded bin lined with a plastic bag.
• Remove full bags, and clean containers and surrounding area frequently.
• Refuse storage and removal must be arranged and designed to be protected from pests (those pesky flying insects, cats, dogs and foxes in particular) and mustn’t contaminate premises, drinking water or equipment.
• Either site refuse storage externally with a roofed shield if space allows or in a non-food area with plenty of ventilation.
• Keep wheeliebins clean and clearly marked with the restaurant name.
• For larger businesses bulk collection of refuse can be arranged. One large London restaurant mixes up its refuse collection and uses 120 local authority paid bags a week at a cost of over £1,500 a year. Pigswill bins, bottles and boxes are collected by another firm. The pigswill is ‘cooked’ in vats by steam and fed to pigs.
• Contact your local authority for what is on offer as the type of service offered varies as well as charges. Contact them too for disposal of white goods (fridges and freezers for example).

Pest control

Keeping those infestations of rodents, insects or other food pests out is a priority:

• Any infestation will lead to contamination of food and food surfaces, damage of food stocks and the building.
• To combat this, the maintenance of high standards of cleanliness, good housekeeping, food storage and proofing of the building should be undertaken.
• Both country and town have vermin problems with cockroaches, mice, pharaoh ants (tiny brown ants) and rats, all of which can be dealt with by local authority or private contractor exterminators.
• The cleaner your restaurant, and that means behind fridges etc where vermin love to congregate, the less problems you’ll encounter.

FIRST IMPRESSIONS

First impressions of your restaurant are vital.

• Is it welcoming and well kept?
• Is it well lit?
• Is there any cracked paint?
• Are the windows clean, the entrance swept and door handles polished?
• Are the menu and times of opening visible?
• Is the entrance to the car park clearly signed?
• If you have a garden and paths are they well maintained?

If these are ignored, customers will ignore you and go elsewhere. If the property looks dirty, they’ll wonder what the kitchens and toilets are like.

All properties need the basics over and above the obvious such as a dining area, kitchen and loos: office space for paperwork, good storage space other than the kitchen for supplies including wine, rubbish (where to store it until collection), staff lockers or storage area for personal belongings.