Drive-Thru Espresso Rent

[coffeehead]

Hello, I am opening a drive thru only esspresso coffee shop. The store will be approximately 15 x 20. I will be constructing the building and will own it outright but renting the land. How much rent for land should I be paying for this? I know location is key. Just would like to have an idea.

Thanks

 

[coffeehead]

Hello anyone!!!! Surely someone here has some input on this.

 

[Coffee Guy]

Hey Coffee Head:

Some people in this forum may not be shop owners, etc. and others may not know how to answer this question. First off, where are you located, and why would you build a building first and plan to place it next? It should be the other way around. A 15X20 is a good size building and will require a lot of land. Next I would ask, why rent the land instead of purchasing it? I would say look for land to purchase then you can have all of the say so, and not risk the chance of getting booted off if the property owner decides to sell. My sugesstion would be to find a commercial realitor to find a parcel for you. You'll be happier if you did. Give that realitor a list of things you are looking for including traffic count, demographics, etc. You can always start off with a good lease with an option to buy. That's where I'd start. But your question about what a good rent for land is not an easy one to answer.

 

[rbduha]

Bellision recommends about 4-6 % of sales as the standard. They have extensive experience in the drive thru business.

 

[janie1963]

I will be renting the land on which we are building our drive-thru and will be paying $500. per month. I'm a bit nervous because the landowner is a developer and has a lot of ideas, however the land is also for sale. There are 4 HUGE lots(mine is 1 acre) and we are expecting the final building permit by week's end. The landowner callled yesterday to ask if we could expand our building (it's going to be 8x16) so he could put a little office in the back. This would be for "show" only, so he can place a billboard advertising his condos at the beach(can't have the signage without having an on site office). Theres NO way we can do this...we'd have to resubmit an entirely new plan to the county and my husband already has all four walls framed. And we can't just add on a few feet because we had to put the bathroom in one end. I'm also concerned because the landowner mentioned at one point that he wanted a month-to-month lease and I feel I need at least 12 months, afterall we are investing a good amount of $$$$ here. The good side is that I doubt he'll sell the lots as he want $100,000 for an acre thats assessed at half that amount.

So, to answer your question( I got a bit sidetracked :wink: ) Most locally are paying around $500 per month for rent.

 

[Gigantomachia]

Question: When bartering about rent, should we suggest 4-6% of sales or set monthly payments first? Which is the better approach??

Thanks.

 

[Coffee Guy]

Try to set a rent schedule and go flat rate when setting up your lease. That way you know what your rent is going to be. If you go on a percentage basis that 4-6% could make your rent go higher based on your sales. Why open your self to that?

 

[Marotti]

rent depends on location

We are looking for a location for a drive-thru hut. Like your original post, we are putting an existing building on a leased property. This is the concept for these units. What we are finding here is such a BROAD range of rents. Anywhere from 700 to 2500 a month. I would be curious if anyone doing this kind of business (not a sit-down coffee shop - just a drive thru) has a maximum rent they will pay? Does anyone use a percentage to base that on - like "we won't spend over 50% of sales on rent".
or
What percentage of sales do you pay for rent?

 

[KG]

You are lucky,

I am trying to do the same thing. However I am finding that everyone here is making me buy the land outright, which would cost me 200,000, at the least.

I know in the end to own the land would be great. But that's a lot of Green Beans if you catch my drift.

 

[Chelle]

This is a really interesting topic. We have had a harder time finding securing the location for our drive thru than any other part of opening this business. I started looking for a ground lease in the $1000/mo range, and two locations have fallen thru. Mostly because commercial land owners don't want to lease such a small parcel. It's not "the highest and best use" of the land.

We are now moving to the next level and leasing a space that is more than twice that price and nearly a half acre, but a primo location....probably one of the best in the area. Traffic counts are upwards of 50k. I'm scared, but where would the fun be if it weren't a roller coaster

 

[alexbailey]

Calculating rents

Here is an easy rule of thumb for determining rent. The only flaw is the prediction of the sales volume. Let's say you were choosing between 2 locations. Location 1. Costs $500/mo and Location 2 costs $1,000, which is the better deal? On espresso based drinks on average you only have to sell an additional 10 cups per day in a 6 day week to be indifferent about the $1000 location. In other words every $500 increase needs to be met with a 10 cup per day increase in sales in order to justify paying the extra rent.

You will spend a long time looking for a location at 4-5% of sales and you probably won't get very far. No property owner will give you the time of day. The bottom line is this: location is everything assuming the coffee and service you provide is great.. Be willing to pay $2,000 for a spot if it is the ideal spot. Better that than a $500 location that never breaks even due to low traffic.

 

[rdenully]

Location.....?

What area of the country are you all doing this in? I am just starting to look into this myself and am trying to figure out where to begin. The area of course will give me a better idea when discussing rent. Its either going to be a drive thru hut... or cafe. The debate is one. If anyone has any advice I would greatly appreciate it!

 

[PonyExpress]

I will post a thread about this as swell, but for people who replied to this one: what is the best way you've found to approach locations about renting? Like shopping plazas and gas stations?

 

[cho12]

Sounds like a interesting idea, but the market is small

 

[cisco]

This is a great idea. Can't help on costs but love the concept.