May 10, 2016
4:08 pm

Quick Service Restaurant: 6 Reasons Why You Need a Site Audit Before You Buy Real Estate

Quick Service Restaurant Site Audit

So, you’re looking for the perfect location for your hot new fast food restaurant. There are a lot of great commercial realtors out there.

The good ones can provide you with invaluable advice on choosing a location with high traffic flow –maybe a corner lot with access to passing traffic on two main streets. They can likely recommend a vibrant neighbourhood that matches your customer demographic. They may be able to help you weigh the pros and cons of leasing versus financing, and hopefully, they are master negotiators who can help you get an incredible price. However, a realtor’s expertise only goes so far.

Performing a site audit before you commit to buying is one of the smartest business decisions you can make.

 When it comes to evaluating the suitability of a site, it’s never too early to get your restaurant design consultant involved. Contracting your design/engineering partner to perform a site audit before you commit to buying is one of the smartest business decisions you can make, and here are six reasons why:

1. Think of your Site Audit as the Commercial Equivalent of a Home Inspection

Choosing the wrong site or building can have costly long-term repercussions that can affect your profitability – and in some cases, impact the very viability of your business.Those who buy a home without getting a home inspection first do so at their own risk. The same goes for a pre-existing restaurant site, vacant retail space or undeveloped lot.

Like a home inspection, the purpose of a site audit is to ensure you are getting a safe, structurally sound building/property that will align with your design plans – and does not contain any hidden surprises that can require expensive repairs.

A site audit will help you determine if the existing infrastructure is suitable for your specific needs or if major renovations will be necessary. The big question that needs to be answered is whether or not your design plans are feasible in the building you are considering.

Sometimes a building that looks fine at first glance will require significantly more work than you anticipated – which can add to the price tag, set back your planned opening date by months and potentially limit the services you can offer. A site audit reveals any deficiencies and helps you understand if there are particular risks associated with the property.

For example, one of the most important, but often overlooked structural elements, is the roof. The majority of commercial buildings are designed with flat rooves, which can really take a beating in a climate known for constant freeze/thaw cycles. Given that you’re about to invest heavily in your interior design, you don’t want to risk having it all ruined by water damage. Roof repairs can be notoriously complex and costly in many cases. Before signing the contract and investing in a renovation, it is essential to have a structural engineer inspect the roof membrane and assess its condition.

Ultimately, a site audit is an investment in peace of mind and risk management.

 2. Evaluating Equipment

Good news… the property you are looking at seems to have a kitchen equipped with everything you need: double grill, deep fryers, walk-in coolers, even milkshake machines. But how do you know you’re not buying a lemon? A full-service design partner, will be able to look at the equipment and provide you with an idea of the expected lifespan. Conversely, you may be advised to invest in new equipment that will better serve your needs.

A prime example of this would be the roof-top HVAC unit (RTU). The RTU is one of the more expensive pieces of equipment in a commercial building. If the building was previous used for retail, and you want to now turn it into a restaurant, chances are the RTUs will need to be upgraded in order to handle the additional heating/cooling loads.

3. Cover your Bases. Choose an integrated Design Firm to Conduct Your Site Audit

An integrated, full-service design partner can bring a team of commercial design experts to provide a comprehensive top-to-bottom evaluation.

  • An electrical engineer will review the existing panels, switchgear and electrical service to ensure it can safely and efficiently meet your consumption demands.
  • The structural engineer will evaluate the integrity of the building to assure you that there are no causes for concern. He or she will also determine if the existing structure requires an RTU upgrade – and whether or not the building could handle the required system.
  • Mechanical engineers can give a thumbs up or thumbs down to the HVAC systems.
  • Plumbing experts will look for signs of past or potential problems.

If your design firm does not have all of these capabilities in-house, your audit may be completed by a generalist who may overlook key issues. Some smaller design firms will subcontract experts, which will result in inflated costs and make it harder to coordinate a comprehensive audit in a timely manner.

4. Site Audits Are Just as Valuable on Undeveloped Lots

Site audits are equally important when buying an undeveloped property. Choosing the wrong lot can restrict your opportunities as a business owner. And don’t forget, lots always look bigger when there are no buildings or parking stalls built.

Your design/engineering partner will go through a checklist to ensure the site meets your specific needs.

  • Does it allow for adequate access and setbacks?
  • Does it have ample parking and overflow areas?
  • Does it have convenient access for traffic?
  • Are there any architectural controls or landscaping requirements?
  • Are there any existing municipal utilities and right-of-ways that could restrict the site design?
  • What is the condition of the existing municipal infrastructure like sidewalks, concrete curbs, and gutters? Some municipalities will require the owner to upgrade the adjacent municipal infrastructure as part of the site development work, should they be in poor condition.

A fully-integrated firm provides in-depth understanding of all applicable codes and bylaws. It can accurately determine the size of building you can realistically expect to build – based on the dimensions and configuration of your property. The design firm can also advise you if the property is suited to a multi-lane drive-thru or simply a single lane offering – or if a drive-thru is possible at all—typically, municipalities frown upon having drive-thrus directly adjacent to a residential development

 Making the sale conditional on completion of a professional site audit is a valuable exercise in due diligence and investor/owner confidence.

 5. Intricate Zoning Guidelines Sometimes Require Deeper Investigation Than Commercial Realtors Can Provide

In the majority of instances, commercial zoning is relatively straightforward. However, properties zoned Direct Control (DC) are a notable exception.

DC zones are typically assigned to environmentally or historically sensitive areas of the city.  Due to the unique nature of these areas, DC zones are created to provide a special set of rules and guidelines, as well as permitted/discretionary uses that are different from the typical Residential, Commercial, Industrial, and Agricultural zones.  Each of these unique areas are typically assigned its own DC zoning, with specific guidelines that only apply for that particular area.

The good news is that DC properties are often approved for retail businesses. Unfortunately, the authorized land use is not black and white, as the “controls” can sometimes restrict development. On top of that, the rules around DC zoning can vary within a city or municipality.

There’s been cases where business owners buy a property zoned direct control only to find out later that they are unable to install a drive-thru, or that only a limited number of parking spaces are permitted.

As part of the site audit, a design and consultancy firm will directly contact the city planning or municipal zoning department if there is cause for concern. Drawing on an understanding of the client’s plans for the property, pertinent questions can be asked and appropriate assurances obtained before the client commits to signing the real estate offer. If the zoning proves to be restrictive, your design firm can advise if it’s necessary to search for another location.

6. The Foundation for Your Success.

Don’t be saddled with a restaurant site that limits your opportunities, or has the potential to become a bottomless money pit. Making the sale conditional on completion of a professional site audit is a valuable exercise in due diligence and investor/owner confidence.

When your site audit comes back with a glowing recommendation, and your offer is accepted, you can breathe easy and finally pop some champagne to celebrate new beginnings for you and your quick service restaurant.

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