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The best strategy in launching a restaurant or similar foodservice operation is to buy and own the building or space if you can financially afford to do so.  If the restaurant is not successful in either a three-year or five-year operational horizon, then at least you have a property that more than likely has appreciated.  You can always lease it to another potential restaurant owner who may be able to make a successful restaurant with a different food concept or vision.  Creating a cash flow situation for yourself is a much better strategy than paying lease payments over a multiple-year period.

For the lease option, landlords are usually not your friend in most cases, and they hold the upper hand in setting the terms and conditions of the lease. Also, they can add CAMS or Common Area Maintenance Services to the equation. The cost of CAMS can be quite high, and the landlord does not have to demonstrate that it is cost-effective or that it adds value to your operation.  Landlords are typically not open in the least to making any changes to the lease that are fair to the tenant or that balance the relationship.

I have negotiated two restaurant leases and have found them to be mostly boilerplate that is not easily understood and requires careful reading.  Most leases put the onus on the tenant and relieve the landlord of most responsibilities.  I did not consider the two leases that I negotiated to be fair or reasonable.  So, if you have to lease, then I recommend that you obtain the services of an excellent commercial real estate agent who knows the ropes and can negotiate on your behalf.  Also, you would not go far amiss if you include a knowledgeable lawyer on your team.  Having two such people on your side may save you hundreds of dollars and maybe thousands over the term of the lease.

I have three other comments regarding leasing a space.  First, I would obtain an inspection report from the landlord that provides information on the physical space and all installed systems, such as HVAC, plumbing, and electrical, etc. Such an inspection offers full disclosure for both sides from the outset.  I would ask the landlord if he would pay for the inspection or failing that if he would share the cost.

Second, I would limit the term of the lease to three years.  If you cannot make a go of the restaurant in three years, then you do not want to be on the hook for an additional two years under a five-year lease.  The key point here is that the lease extension provisions can be written to provide one or more lease extension options beyond the initial term.

Finally, and this is critical to your negotiation strategy, you must be able to walk away from the deal if the deal is too one-sided. The location may be an excellent choice, but there are always other choices.  I should have walked away from the first restaurant location because the landlord made too many unreasonable demands.  It was a costly lesson for me.