Decision between two commercial leases for boardgame cafe

[MetalEye]

Hi,

I'm looking to start a boardgame cafe in a big city, basically I'm between two properties on the same street which both have a long (10yr+) lease for sale.

The first is a rather small, cozy restaurant that can seat like 20 people, with a large kitchen that I would probably under-use since I'm thinking to do mostly coffee, drinks and maybe burritos/pancakes for food. This place has no business rates and a cheap rent (15k p.a.), but a high premium of 100k for the lease. My main concern with this place is that it's a bit small for a boardgame cafe and the lease is pricey, just for supposedly the fittings that come with the restaurant (it does look quite nice).

The second place is much bigger, used to be a diner, about 45m2 retails space, but it has been stripped down completely. I would have to redo the tiling on the floors, the walls, install a counter and repair all the kitchen stuff. The roof is also collapsed in two places but the landlord is fixing this. Because it is bigger, rent is 25k p.a. with 8k business rates. Premium for a brand new lease to be arranged is only 10k however. So this place would be a bit more suited as a boardgame cafe (bigger), but having to rebuild it may take a lot of time and money. Still, I think it may actually be worth it. But I'm a bit concerned about how much time it would take to get it going.

So, my question is, what would you pick if you were in my place?

 

[fisicx]

Why do you need your own cafe?

Many places have a room you can rent with access to food and drink. A lot cheaper than coughing up for a lease on a business that might not be sustainable.

My son meets up for board games in a cafe each month. The cafe is closed to the public that evening.

 

[Newchodge]

Why do you need your own cafe?

Many places have a room you can rent with access to food and drink. A lot cheaper than coughing up for a lease on a business that might not be sustainable.

My son meets up for board games in a cafe each month. The cafe is closed to the public that evening.

I think the OP is, naturally, interested in making a profit which will tend to come more from drinks and food than from the event itself. It may be a good way to start and judge interest levels, but then the potential customers may prefer to stay with what they have become used to.

 

[Lisa Thomas]

Do you have any experience with this type of business? 10 years is a long commitment. Are there any break clauses?

 

[Mark T Jones]

It's a long time since I've seen lease premiums, particularly one as high as £100k.

In many places landlords are offering incentives such as rent-free periods or to subsidise/undertake the fit out for you. (Yes, landlords are now our competitor!)

I can't claim to now this, but presumably you have researched it - but I'm guessing that a board game café is more of a destination than a footfall/walk-in? In which case you really don't need a premium location?

Also, there are a number of other variables you need to throw in before making a decision, such as:

- Break clauses
- Dilapidations clauses
- Utilities
- Deposits / PGs / security required

Amongst others.

In short, none of us can answer the question, but hopefully your business plan & research can give you more insights.

 

[fisicx]

Just asked my son. They tried to run games evening more frequently but there wasn’t enough interest to make it pay.

To try and fill a cafe every evening is a very hard ask. Especially as the players are there to play and not spend cash on food and drink.

 

[Jprandss]

Jesus this is a tough business to get into.

I would personally take that 100k one off the table unless you already have five of these cafe's going and know that they are (very) profitable.

45m2 is still very small for a cafe, but there is less upfront risk- it wont cost 100k to make it work.

Either way, make sure you have a 1 year or 18month break clause, tenant only. You'll know very quickly if the idea will work or not.

If these two are currently empty, likely the LL will negotiate on both the ingoing or the rent, or both. Ask the agent, or ideally ask them directly.

You could ask the 100k one if they will have you as a popup, you'll pay them a higher rent for 6 months (say 2k a month), on a licence with no security of tenure. If it works then you pay the 100k and sign the long lease. If its currently empty the landlord doesn't have much to lose.

 

[Porky]

This is going to be tough IMO, my son plays at a chess club that meets every week evening in a cafe.

It’s a very busy chess club, often as many as 12 to 15 boards, 24-30 people but the thing is you are lucky if any of them buy so much as a can of Pepsi.

He needs to sell a lot of cans of pop to cover £100k lease, I agree a free trial period could be a thing but keeping costs down to an absolute minimum would be key here.

Sounds like neither option is right on the face of it

 

[WaveJumper]

It's a long time since I've seen lease premiums, particularly one as high as £100k.

In many places landlords are offering incentives such as rent-free periods or to subsidise/undertake the fit out for you. (Yes, landlords are now our competitor!)

I can't claim to now this, but presumably you have researched it - but I'm guessing that a board game café is more of a destination than a footfall/walk-in? In which case you really don't need a premium location?

Also, there are a number of other variables you need to throw in before making a decision, such as:

- Break clauses
- Dilapidations clauses
- Utilities
- Deposits / PGs / security required

Amongst others.

In short, none of us can answer the question, but hopefully your business plan & research can give you more insights.

Totally agree on the £100k I cant believe anyone would pay a premium, the boot has been on the other foot for a long time now with landlords needing to offer either rent free periods or major contributions to fit out.

OP as already has been suggested would be much better placed to seek a pop up deal there’s plenty of empty units around and many a landlord will be looking to get these deals done now as we reach peak trading times in the run up to Christmas