At first glance, this title may appear a little absurd, particularly for those restauranteurs who have never experienced a landlord that doubled as a partner. For restauranteurs just entering a specific market, however, a landlord can offer a wealth of information. They often know the community in ways that would take operators years to fully encapsulate. They know the restaurants in the area that fall in the “competitor” bracket. They may also know the local suppliers, specifically those in a unique niche. In essence, the right landlord can be like a partner. In fact, some relationships are written up as such in the agreement.
Let’s explore the relationship between restaurant owners and landlords and how they can help each other achieve success.
Be Wary Signs
A few telltale signs suggest the relationship may not bode well. These include difficult communications from the beginning, limited to no negotiations, and that uncomfortable feeling in the pit of your stomach. We’ve all had those moments when, looking back, we realize there were numerous forewarnings, not the least of which were the internal signposts. Invariably, when we go against them, the location proves difficult, and the support is minimal to non-existent.
The Landlord/Restaurant Owner Relationship
Ideally, a restaurant owner and landlord’s relationship is symbiotic and reciprocal in nature. Like coral and algae or sharks and pilot fish, each helps the other achieve greater success and survive obstacles than had they existed separately. In today’s world, there’s a growing belief that each can contribute to the other’s success.
This concept involves a hands-on relationship in which both parties assess the concept, branding, and menu. Instead of a landlord relying on a tenant’s business acumen and the ability to meet their costs, they work together. A collaborative approach includes active participation, sharing knowledge, and working as a team.
The Joint Venture
Going further than mutual support is the joint venture with landlords taking equity stakes in their food tenants. In some cases, they’re even partnering with chefs, sharing a percentage of the rent. This relationship benefits independent restauranteurs who don’t have access to the capital that large chains or publicly traded companies possess.
Some landlords are also open to short-term partnerships that help get new restaurants established. In these cases, they take an equity position and make money available, with an understanding that the restaurant can buy itself back. When it works, these partnerships may develop into a long-term business model, branching out to third-party landlord situations.
Landlords are also spending more on the overall look and aesthetics of restaurants, knowing that today’s customers seek that memorable, unique experience. In an ideal relationship, a successful best-in-class food tenant can help landlords in numerous ways, including driving traffic, generating social media buzz, and exciting local diners. This is particularly helpful in mixed-use centers that can gain much traction from a well-known chef or unique eatery.
Real estate developers and landlords known for forming partnerships with restaurants stay abreast of the ever-changing tastes of today’s diners and keep a wary eye on competitors. To accomplish this, they can turn to F&B Insights.
F&B Insights offers the world’s largest menu database, giving landlords and their tenants’ competitors’ market pricing information. This enables them to make informed business decisions about accurately pricing their menu and raising prices without affecting demand. All menus are in one place, and restaurants receive alerts should a competitor make a change to their menu. This insight provides the information restaurants need to confidently boost their bottom line.
At EMERGING, we provide real estate and technology solutions for the industry’s top restaurant and entertainment concepts. Are you ready to explore the possibilities in today’s emerging partnerships? To learn more about F&B Insights and our real estate opportunities or to schedule a complimentary consultation, contact EMERGING today.
What are the benefits of a restaurant business partner?
Some of the top benefits of developing a partnership include financial support, division of labor, bringing a diverse set of skills to the table, and camaraderie that makes the good times great and the hard times bearable.
How do you make a good restaurant menu?
A good restaurant menu is all about the design and, of course, the items and strategic pricing. Gone are the days of two-chapter restaurant menus. Thanks to the pandemic and diners’ preferences, restaurants are leaning toward a few excellent signature dishes or sharing plates over an overwhelming number of choices. The menu is the face of your brand, so make sure it retains your voice.