Our first restaurant build out - before and after!

Commercial Real Estate Investing
11yFollow

Our first restaurant build out - before and after!

Dave Hurt
SC · Member since 2014 · 303 posts · 183 votes

Hello All, 

The commercial RE forum seemed like the best place to post this.

I just wanted to share before and after pics of our first bar/restaurant build out!  This is our first project and we have certainly learned a lot!  We went from a gutted space that was basically an old industrial building and we built out a full kitchen with walk in cooler/freezer, 70-tap draft beer system (not yet installed in the after pic), full bar, and 80 seats inside with an additional 35 seats on a 600 sqft covered patio.  This is the first of 12 units that we will be building, and after many delays and unexpected problems we are FINALLY going to be opening our doors.  I have certainly learned that things never go as planned, and you have to be able to adapt very quickly in this business!  Enjoy!

5Reply
128 views

Most Popular Reply

Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11y

Decades of experience in all facets of the restaurant industry before getting into real estate.

It is a very hard business.

Right now you have the "New Factor" as a restaurant. Do not get overly excited by lot's of business to check you out. That Is nothing that isn't normal.

I see owners hands on in the beginning and things are going well. Then owner get comfortable and believe things will hum along with the status quo. Biggest thing I see is they get cheap in the kitchen and use great products but have so-so cooks preparing the meals.

I want to repeat as it is that important. Many concepts have test kitchen facilities where they test product with quality ingredients and believe it tastes amazing. When sales fall flat at  a store location they can't figure it out. It comes down to execution of the product. You could have meat at 20 a pound costs but if prepared wrong it can taste like crap. Conversely if you have only decent ingredients but a great chef the dish can be made to taste great.

It is as much about skill as the products used. I eat out a lot for business and pleasure. I would rather wait 20 minutes longer and have poor service and excellent food then get good service with fast food that tastes poor to okay.

Consistency of excellent food will be a major key to your success of the restaurant. Your biggest killers to your bottom line will be keeping rents in place and increases over the years if you do not own the space, labor cost policies with people asking for 15 an hour, and having FFC's ( fixed food contracts where you have set food costs even in a rising market ). FFC's are huge for small operators because it is the big boy's advantage in that if food costs soar you can't pass along all of that to the consumers so it starts eating into your bottom line.

Another factor is long term planning. Right now the asset is new and fresh. Over the years it will get older and older. Classic mistake is the owner will hoard cash and live fat for years and make good bank. They will not allocate 80k per year over 10 years for a re-image.      

Podcast Guest on Show #47
NNN Invest53 Reviews
WebsiteView Page
5Reply
See this reply in the discussion

69 Replies

Jump to latestLatest
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    @Nyla Hucks I will shoot you a private message!

    0Reply
  • Matt McCourry
    Flipper/Rehabber · Myrtle Beach, SC · Member since 2014 · 95 posts · 35 votes
    10y

    @Dave Hurt

    Dave looks fantastic!  I am a native of the Myrtle Beach area and can't wait to visit!  Where exactly is it?

    Congratulations on the hard work and I look forward to a cold one!

    0Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    @Matt McCourry thanks! I'll shoot you a message with the location.

    0Reply
  • James SlaughterPro Member
    Environmental Scientist / Investor · Statesville, NC · Member since 2015 · 94 posts · 41 votes
    10y

    @Dave Hurt  Congrats on new location, looks like your killing it.  I am also in if your hosting a BP meetup. 

    Hope you have been cashing in on the success of the Carolina Panthers! 

    1Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    @James Slaughter thank you!  Yes the Panthers have definitely been good for business :)

    0Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    Another update - coming right along!  Still on track to complete next week!

    1Reply
  • Roc P.
    Philly Area, PA · Member since 2008 · 297 posts · 27 votes
    10y

    Congrats Dave on your success!!!! Do you have management team in place or are you at the SC day to day guy? Continued success looks like you have a great concept for your area!!!

    0Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    @Roc P.so sorry for the delay - missed this post!  We have a great management team in place!  Our Myrtle Beach GM is a gentleman that joined our team at our first location in Charlotte, and we trained him from day 1 to run his own restaurant.

    Here are a few update pics of the Myrtle Beach location finished product and 'in action' - it never gets old seeing an empty shell come alive as a beautiful restaurant!  This location has been open for a little over a month...now on to the next!

    0Reply
  • Michael Karpie
    Real Estate Agent · Myrtle Beach, SC · Member since 2015 · 60 posts · 14 votes
    10y

    Review: I thoroughly enjoyed my experience during the VIP opening of The Brass Tap. The staff were helpful and courteous and the entertainment was great! Keep up the good work Dave, you have a good formula!

    Michael Karpie
    Beach & Forest Realty

    1Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    Thanks @Michael Karpie! So sorry I missed you!  I will let you know next time I'm in town - maybe we can grab a coffee (or a beer!).

    0Reply
  • Alex Franks
    Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
    10y

    Dave Awesone I still have a lot of really good friends living at the beach  so I'm living vicariously through them  and ask them to stop by and check it out .

    I think it's awesome to see somebody have another business besides just real estate At the same time is involved in real estate. Everybody just seems to focus just on real estate which is pretty awesome to see you with a different restaurants good for you. I'm also involved in some other businesses in other states well I'll say legal States lol nothing else to be said.

    I do rely on real estate to make a living but I also see my other bussiness out their for me as well.

    bare with spelling and grammar as my phone is recording me into hard to go back and check message with that little window.

    Alex

    2Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    10y

    What's your gross profit margin average per location so far before taxes?

    Restaurants I like to see 20% plus minimum. If it's low double digits I can hit that passively on real estate with no work versus running a business.

    If your hitting 20's and 30's I can see it being worth it.

    Have you tried getting an option on a strip center your restaurant goes into or the free standing building. This way regardless of the business in the future you own the physical asset and also possibly have other tenants paying you money.

    There is a guy here locally with restaurants in GA who is tired of paying rent and wants to own where his restaurants are located.

    Podcast Guest on Show #47
    NNN Invest53 Reviews
    WebsiteView Page
    0Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    Thanks @Alex Franks- I think I know what business you're referring to!  

    @Joel Owensbecause a large portion of our sales is alcohol, which is high margin, we are hitting in the 20-30 range.  The key, as you know, is effectively managing food and labor costs, which can eat our margins up quickly.

    We aren't pursuing any option deals like that as of yet, but it's definitely something we've discussed.  It's hard enough finding ideal spaces to lease, let alone buy.

    1Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    10y

    Hi Dave,

    I have seen in some leases smart tenants negotiate a ROFR ( right of first refusal ) in the lease.

    This way if the landlord ever sells the single freestanding building or the strip center your restaurant is in you have the option, but not the obligation to purchase.

    You have the right to match any bona fide offer in writing that comes in. If someone is paying a premium you may want to pass but if the price the seller is willing to sell for is good you want to know about it.

    There was a Marco's pizza up the street from me where if I knew it was for sale I might have bought it. Out of town partners owned it and sold to a local franchisee that owned others in the area.

    Podcast Guest on Show #47
    NNN Invest53 Reviews
    WebsiteView Page
    0Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    10y

    Thanks @Joel Owensthat is definitely something to consider moving forward, as most of the markets we target are definitely markets I would love to own commercial property in as well.  Do you find that if you build a ROFR into a lease, it affects the level of TI the landlord is willing to provide?  Part of our model, and why we've been able to grow so quickly, has been large TI allowances.

    0Reply
  • Roc P.
    Philly Area, PA · Member since 2008 · 297 posts · 27 votes
    10y

    Great stuff Dave and Joel top notch info. 

    0Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    9y

    Thought I'd provide an update on this thread. I mentioned that we had a signed lease in Rock Hill, SC for late 2016/early 2017 delivery - landlord was a little delayed in getting their work done so it was delivered in mid-April 2017. Construction is now underway on that project (restaurant #3) - I've included an update pic of our progress so far - should be complete by the end of August. I'll update with more pics a bit later on!

    1Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    9y

    Glad you are doing well.

    Podcast Guest on Show #47
    NNN Invest53 Reviews
    WebsiteView Page
    0Reply
  • Dave Hurt
    OP
    SC · Member since 2014 · 303 posts · 183 votes
    9y

    Thank you @Joel Owens! Took a little break from BP when we had our first baby but still moving forward with our projects!

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free