Manhattan Restaurant Law: Considerations When Buying a Restaurant or Bar

When it comes to launching your new eatery, or expanding into a new location, the temptation to jump at an existing commercial space already outfitted for restaurant use can be almost too much to resist.

However,  a New York City restaurant attorney would urge caution. Whether assuming the lease of an existing establishment, or signing a commercial lease on a space purported to be outfitted for restaurant use, there are a number of important considerations. 

On the plus side, buying a restaurant or bar is like taking possession of a turn-key operation. It should be a proven, profitable enterprise. Equipment should be in place. A reputation and annual sales expectations can have value beyond business inventory and other assets. And, in the right circumstances, buying an existing restaurant can actually be cheaper than starting an eatery from scratch.

However, when a seller demands a large premium for such “good will” assets, the benefits and drawbacks must be carefully weighed. Franchise opportunities, in particular, often exact a huge premium for little more than a name and some branded paper cups and napkins.

Taking over an empty restaurant space also poses challenges. For one, there may be very good reasons that location was not successful. Or a restaurant’s bad mojo may remain behind, tainting a new startup effort. You may even find unpaid bills make food and drink vendors uncertain about resuming deliveries to the location of a previously failed enterprise.

This is also a consideration when assuming the lease or assuming restaurant operations. If vendors are left unpaid, you could be on the hook for thousands of dollars in additional expenses or faced with the prospect of vendors refusing delivery.

And, while you may find a landlord willing to deal to fill the space with another restaurant tenant, the condition of equipment could make refitting a space more trouble, and potentially more expensive, than simply starting from scratch.

Consulting a law firm familiar with real estate, restaurant, liquor and zoning laws, can make it far more likely you will secure a great location for your new business. Considerations include:

-Proper ventilation and code compliance.

-Fire and evacuation safety.

-Parking and ADA compliance.

-Certificate of Occupancy and zoning requirements.

-Liquor license requirements, including requirements of the New York State Liquor Authority regarding distance from churches, schools, etc.

-Commercial lease issues, CAM charges etc.

-Franchise Agreements

The Wright Law Firm is a business law firm located in Midtown Manhattan. Call (212) 619-1500 for a confidential consultation.

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