By Joel Pfyffer
If you have found yourself in the exciting situation of starting a new career as the owner of a pizzeria, you have some work to do to make sure it’s going to be a long and illustrious one. In my previous article, “Signing Your First Lease Part 1: A Veteran Pizzeria Owner’s Approach to Option Periods,” I discussed my reasons for negotiating a 2-year + 2-year + 5-year lease agreement to ensure flexibility as a start-up pizzeria operator. Now let’s delve a little deeper and look at some big mistakes you’ll want to avoid.
So now that you have all intentions of leasing a space, it’s time to do some homework on the space itself. Whether it’s a “drywall and concrete” space (empty and ready for build-out) or you’re taking over a space where an unlucky entrepreneur didn’t succeed and you plan on moving in and retrofitting it to your liking, you have some work to do.
One of the hardest and most expensive lessons I have had to learn is the issue of heating and air conditioning. I was unfortunate enough not to have done my due diligence when I signed a lease in the middle of November. The place seemed great, and, without giving it much thought, I just assumed that all of the equipment worked properly.
Wrong. After untold amounts of money, stress and sweat (no pun intended), it took me years to get the environment comfortable for my customers.
I’m going to skip forward to April of the next year. Having been opened six months, I was feeling pretty good about my small but growing customer base and was ready for summer! What I wasn’t ready for was the heat…
Let’s start with the fact that ovens in our business give off a lot of heat, whether you are making pies or not. Obviously, you can’t wait to turn them on when you get busy later in the shift. Those puppies get turned on the minute you walk through the door in the morning, and they bake at 500 degrees or so for the next 12 hours. That’s a lot of heat generation! Now add in the fryers, cook-tops, employees and (hopefully) customers, and you’ve got yourself a very warm space.
Needless to say, I discovered that my building wasn’t ready for the summer. Of the six air conditioning units that were installed in my restaurant, only two could make even a half-hearted attempt at cooling the space and helping me out. The previous owner, down on his luck, did not have the funds to fix the air conditioners as they broke, let alone maintain the ones that were working; he subsequently went without sufficient cooling as they died, thus furthering his decline. Who wants to eat a hot pizza in a hot restaurant? In July? In North Carolina? Not many, it seems.
In short, I did not conduct my own due diligence when I signed the lease. Therefore, all of the previous owner’s HVAC problems became—*poof*!—my problems. Four out of the six units simply did not work.
Now, mind you, I had just spent six months building and marketing my business in any way I saw fit: advertising in print, fliers in mailboxes all winter long, contacting local schools for lunches, hiring and firing as my staff shaped up. All of this costs money, so when spring came around the corner, it’s safe to say that my bank account was sitting on empty. I had to struggle to find the funds to fix what I could and try to replace what I could on a very tight (or non-existent) budget. It was a very long summer.
I have 16 5×12 windows with absolutely no insulation—or R value—at all. So whatever the temperature is outside, that is the temperature inside, too. It was going to be hot in there even without all of those aforementioned heat generators.
So I started my mad scramble towards comfort. I scraped, borrowed and sure did beg to get everything in working order, tinting the windows to deflect the blazing southern sun, and employed many other tips and tricks to get it somewhat comfortable. In fact, I still battle with the coming summer every single year, getting every unit checked, cleaned and topped off before the annual heat wave.
All of that pain, financial and emotional stress—plus a few panic attacks for good fun—could have been avoided if I’d had someone tap on my shoulder and say, “Hey, you might want to get all of those AC units tested.” That would have saved me tens of thousands of dollars.
So the point is, get all of those AC units checked over before you sign the lease. The moment I signed the lease on a space, all of those problems were now mine.
Find a reputable HVAC company, but avoid the ones that you see on TV day and night with jingles and 1980s vans—someone has to pay for those commercials, and that someone is you!
Look for someone you know you can trust to evaluate those machines, then require the landlord to fix them before you sign the lease and move in. In most signed leases the HVAC is your responsibility, but when you’re a prospectivetenant, it is still the landlord’s problem to solve. Make sure he or she fixes any issues that are found so that you’ll get at least another five years out of them. If some of the units are on the decline, you can insist that a new one be put in before you sign the lease.
If the landlord doesn’t want to fix the problems before you sign the lease? Walk away. You can safely break the LOI and start looking for another space. My bet is the landlord will make it all good, not wanting to lose a new tenant. It might seem crazy to shovel the snow around a unit to get in there and make sure the air conditioning works properly in December, but trust me, the extra effort is worth its weight in gold.
Add this to your checklist too: Inspect all the plumbing, especially the hot water heater(s), and confirm that the drains work. Once, we were looking at leasing a space that I loved and was very excited about, but I got a tip about the sewage pipe. The main sewer line leaving the restaurant was broken 10 feet under the floor of the bank next door. The previous owners had to get it “roto-rootered” every three weeks to make sure the system worked properly, and that incurred quite an expense each time. The situation was untenable, and they left after two years.
Who was going to fix that pipe? The landlord? Nope. It was out of his hands. The bank? Not their problem. The town? Ha-ha-ha. That was funny. So, again, it all comes down to you. (Side note: From what I hear, the problem is still not fixed.)
In closing, I would suggest you comb over this space as if you were buying a used dream home. You might love it, but does everything work? That’s why we have home inspectors. Last I heard, ‘business inspectors’ weren’t or aren’t a thing. It’s all on your plate! So make sure your plate is pretty empty before you sign. Trust me, there will be plenty of other things on your plate for the next dozen years.
Joel Pfyffer is a veteran restaurateur with close to three decades of experience in the food industry. Since 2000, he has owned and operated multiple restaurants, including Prosciutto’s Pizzeria & Pub in Cornelius, North Carolina, a beloved local institution celebrating 20 years of service. Joel also co-founded Culinary Compass, a consulting firm that helps fellow restaurateurs tackle the real-world challenges of restaurant ownership with practical, proven strategies. Happily married and a proud father of two daughters, Joel combines deep industry knowledge with a personal passion for hospitality and community. You can reach Joel at [email protected].
