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janullrich · 23-07-2012, 18:02

Ok I have found a nice place where the keymoney is very reasonable and rent is low. Done a lot of market research and lease is waiting to be signed. I would like to speak to/have correspondance with somebody who is doing this at the moment just to make sure I am going in the right direction. If I am truthfully honest I have paid €2k in deposit and will be looking to pay €20k in keymoney plus €4 in rent for 3 months end of this or start of next with signing of lease. I have about €35k extra for renovations and 3 months trading (without a cent being made - of course there will but just in case). All the money is my ownThe lease is initially 2 years. Although all has being agreed in principal and I am won't open till September I am worried about general day to day expenses and margins. I am down to the nitty critty of things and am a little worried! Cheers

TheInquisitor · 23-07-2012, 18:16

What rent free period did you get for doing all that for the landlord?

aw · 23-07-2012, 18:39

With the way things are, key money has gone by the wayside and I would not pay a cent of it.

In my experience, you should be agreeing a rent free period with the landlord at the beginning to help your cash flow when you open. In fact, I would look for a contribution towards fit out also. But key money? No way.

Also, €35k seems a bit low for a full fit out. Was the unit a coffee shop before and there is minimal work to be done? Do you have to buy furniture, fridges, coffee machine, grinder, washer, ice machine, etc? You won't feel yourself burning through that €35k.

janullrich · 23-07-2012, 18:41

None, as the place is fully fitted out. However I want to improve the place so I am refurbishing it. I will need to close down the shop for 2 weeks at the end of August.

janullrich · 23-07-2012, 18:49

The place is a coffee shop at the moment with all inside except for a oven. It is just very badly run and is not open long during the day. The owner & staff don't make a effort re promoting it. I mean €35k for improving the place as I want it - repainting, bringing in some new chairs, etc if make it more modern. Also I am invisiging a no of months where I will not be profitable and so will need cash in reserve.

sandin · 23-07-2012, 18:51

When I saw Key Money being mentioned I had to check that it was not a zombie thread from 2006!!!

It looks like you are inexperienced in this field - get someone on board immediately to re-negotiate the lease for you. An accountant or a property agent.

Problem number 1 - Key money of 20k - total waste, DO NOT PAY

Problem number 2 - short lease. If its working well, the landlord can kick you out after 2 years, you have no rights whatsoever. - He can them rent it at a higher price to someone else. -bye bye key money, bye bye business.

Problem number 3 - you are THROWING money away and believing a headline low rent. - Over 2 years, rent is 24k, renovations is 35k, key money is 20k - that's theorectically 35k a year in rent. + commercial rates and water rates.

Problem number 4 - how much are the commercial rates & how much are the water rates. Depending on location, you may find another 5-8k being needed for these fees.

Walk away - you seem to have a few bob, there are loads of great locations that you will pay 30k rent for, no key money and possibly fully fitted. A lick of paint and a new sign would be all you'd need.

Low rent = crap location = poor business.

If the location is good and you think it will do well, get a 10 year lease with break clause in year2 & 5. The ten year lease gives you right of tenure. Do not pay key money. If its fully fitted, possibly you can pay extra rent for use of equipment or you could buy the equipment (not for 20k though).

Get first 3 months rent free too.

YellowSheep · 24-07-2012, 09:59

Hi Gavin

I offered you assistance before....Just ask.

Regards Oliver

janullrich · 27-07-2012, 12:25

Thx Sandin for your advise which I have ignored because I have sorted everything out in the last few days including the lease. Btw keymoney is reality. If you are buying out a fully fitted place don't you think you are buying for what is there or do you think it is come all free. Obviously it is you who is living in Zombieworld. Btw rent will remain the same for the 5 year lease so you don't need to worry your little head about it going up. Let me worry about my money.

here2surf · 27-07-2012, 13:12

Can I jump in here and agree that key money is realstic when the unit is coming fully fitted.
Jan. Have you any figures on what your ESB and water rates will be per annum? I know it is subject to location and T/O but I need to find out what the likes of O'Briens would pay in a busy location

bigneacy · 27-07-2012, 14:10

Quote:

Originally Posted by janullrich

Thx Sandin for your advise which I have ignored because I have sorted everything out in the last few days including the lease. Btw keymoney is reality. If you are buying out a fully fitted place don't you think you are buying for what is there or do you think it is come all free. Obviously it is you who is living in Zombieworld. Btw rent will remain the same for the 5 year lease so you don't need to worry your little head about it going up. Let me worry about my money.

Jesus there's no need to be like that at all, sandin was giving you some sound advice, and you repay him by being a smart arse and giving a bollocky reply? - Key money is not the norm or reality at all in today's market, you seem to have convinced yourself of that to make yourself feel better about your badly advised business decision. I would never pay key money for any unit, ever and there's a majority of people on this forum who would agree. You seem to think you have bought this unit or the contents included, you haven't, you've paid for the use of something that has probably already been paid for twice over and you could have gotten included in any unit anywhere in the country for no keymoney.

You've come onto this forum to get advice and that's what you got- if you wanted reassurance and a pat on the back your in the wrong place, try PI.

antoinolachtnai · 27-07-2012, 23:58

It all depends on the location really. How many people walk by every day, and how many people go in? How do these two figures compare to comparable stores? I think the concerns about the shortness of the lease are an issue, especially if you are spending money doing it up. Even if you are massively successful, you could still be out on your ear.

micosoft · 28-07-2012, 14:12

Quote:

Originally Posted by janullrich

Thx Sandin for your advise which I have ignored because I have sorted everything out in the last few days including the lease. Btw keymoney is reality. If you are buying out a fully fitted place don't you think you are buying for what is there or do you think it is come all free. Obviously it is you who is living in Zombieworld. Btw rent will remain the same for the 5 year lease so you don't need to worry your little head about it going up. Let me worry about my money.

What a bizarre use of a forum. Ask a question. Wait for answers. Attack the answers. If you are so certain why did you even post OP?

The Apprentice · 28-07-2012, 15:17

We,ll see him on the forum in 6 months moaning about slow trade and high operating costs .. Adieu my friend

Hanley · 28-07-2012, 17:32

...shoulda gone into the rubber stamp business

micromike · 28-07-2012, 20:35

I think that Jan was wrong posing the thread. Only one person seems any way helpful in the last few threads. It seems to me that people on this site don't like helping other people and attack people and their ideas for the sake of it ie Sandin or Hanley. If you are going to help then don't bother posting. Annoy other people or waste your time doing other things. . Btw as a experienced coffee shop owner keymoney is the reality unless the rest of you rob the stuff to get the chairs etc!!

23-07-2012, 18:02	#1
janullrich Closed Account Join Date: Dec 2004 Posts: 405 Adverts \| Friends	Before signing new coffee shop lease Ok I have found a nice place where the keymoney is very reasonable and rent is low. Done a lot of market research and lease is waiting to be signed. I would like to speak to/have correspondance with somebody who is doing this at the moment just to make sure I am going in the right direction. If I am truthfully honest I have paid €2k in deposit and will be looking to pay €20k in keymoney plus €4 in rent for 3 months end of this or start of next with signing of lease. I have about €35k extra for renovations and 3 months trading (without a cent being made - of course there will but just in case). All the money is my ownThe lease is initially 2 years. Although all has being agreed in principal and I am won't open till September I am worried about general day to day expenses and margins. I am down to the nitty critty of things and am a little worried! Cheers

24-07-2012, 09:59	#7
YellowSheep Registered User Join Date: Oct 2007 Posts: 269 Adverts \| Friends	PM Hi Gavin I offered you assistance before....Just ask. Regards Oliver

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23-07-2012, 18:16	#2
TheInquisitor Closed Account Join Date: Oct 2007 Posts: 1,454 Adverts \| Friends	What rent free period did you get for doing all that for the landlord?

23-07-2012, 18:39	#3
aw Registered User Join Date: Apr 2004 Posts: 347 Adverts \| Friends	With the way things are, key money has gone by the wayside and I would not pay a cent of it. In my experience, you should be agreeing a rent free period with the landlord at the beginning to help your cash flow when you open. In fact, I would look for a contribution towards fit out also. But key money? No way. Also, €35k seems a bit low for a full fit out. Was the unit a coffee shop before and there is minimal work to be done? Do you have to buy furniture, fridges, coffee machine, grinder, washer, ice machine, etc? You won't feel yourself burning through that €35k.

23-07-2012, 18:41	#4
janullrich Closed Account Join Date: Dec 2004 Posts: 405 Adverts \| Friends	None, as the place is fully fitted out. However I want to improve the place so I am refurbishing it. I will need to close down the shop for 2 weeks at the end of August.

23-07-2012, 18:49	#5
janullrich Closed Account Join Date: Dec 2004 Posts: 405 Adverts \| Friends	The place is a coffee shop at the moment with all inside except for a oven. It is just very badly run and is not open long during the day. The owner & staff don't make a effort re promoting it. I mean €35k for improving the place as I want it - repainting, bringing in some new chairs, etc if make it more modern. Also I am invisiging a no of months where I will not be profitable and so will need cash in reserve.

23-07-2012, 18:51	#6
sandin Registered User Join Date: Apr 2010 Location: Kildare Posts: 1,004 Adverts \| Friends	When I saw Key Money being mentioned I had to check that it was not a zombie thread from 2006!!! It looks like you are inexperienced in this field - get someone on board immediately to re-negotiate the lease for you. An accountant or a property agent. Problem number 1 - Key money of 20k - total waste, DO NOT PAY Problem number 2 - short lease. If its working well, the landlord can kick you out after 2 years, you have no rights whatsoever. - He can them rent it at a higher price to someone else. -bye bye key money, bye bye business. Problem number 3 - you are THROWING money away and believing a headline low rent. - Over 2 years, rent is 24k, renovations is 35k, key money is 20k - that's theorectically 35k a year in rent. + commercial rates and water rates. Problem number 4 - how much are the commercial rates & how much are the water rates. Depending on location, you may find another 5-8k being needed for these fees. Walk away - you seem to have a few bob, there are loads of great locations that you will pay 30k rent for, no key money and possibly fully fitted. A lick of paint and a new sign would be all you'd need. Low rent = crap location = poor business. If the location is good and you think it will do well, get a 10 year lease with break clause in year2 & 5. The ten year lease gives you right of tenure. Do not pay key money. If its fully fitted, possibly you can pay extra rent for use of equipment or you could buy the equipment (not for 20k though). Get first 3 months rent free too.

27-07-2012, 12:25	#8
janullrich Closed Account Join Date: Dec 2004 Posts: 405 Adverts \| Friends	Thx Sandin for your advise which I have ignored because I have sorted everything out in the last few days including the lease. Btw keymoney is reality. If you are buying out a fully fitted place don't you think you are buying for what is there or do you think it is come all free. Obviously it is you who is living in Zombieworld. Btw rent will remain the same for the 5 year lease so you don't need to worry your little head about it going up. Let me worry about my money.

27-07-2012, 13:12	#9
here2surf Registered User Join Date: Jun 2009 Posts: 102 Adverts \| Friends	Can I jump in here and agree that key money is realstic when the unit is coming fully fitted. Jan. Have you any figures on what your ESB and water rates will be per annum? I know it is subject to location and T/O but I need to find out what the likes of O'Briens would pay in a busy location

27-07-2012, 23:58	#11
antoinolachtnai Registered User Join Date: Jan 2003 Location: Outer Space Posts: 5,357 Adverts \| Friends	It all depends on the location really. How many people walk by every day, and how many people go in? How do these two figures compare to comparable stores? I think the concerns about the shortness of the lease are an issue, especially if you are spending money doing it up. Even if you are massively successful, you could still be out on your ear.

28-07-2012, 15:17	#13
The Apprentice Registered User Join Date: Aug 2002 Location: Dublin Posts: 1,084 Adverts \| Friends	We,ll see him on the forum in 6 months moaning about slow trade and high operating costs .. Adieu my friend

28-07-2012, 17:32	#14
Hanley Because Hanley Heals... Join Date: Mar 2007 Posts: 17,211 Adverts \| Friends	...shoulda gone into the rubber stamp business

28-07-2012, 20:35	#15
micromike Registered User Join Date: Jul 2012 Posts: 8 Adverts \| Friends	I think that Jan was wrong posing the thread. Only one person seems any way helpful in the last few threads. It seems to me that people on this site don't like helping other people and attack people and their ideas for the sake of it ie Sandin or Hanley. If you are going to help then don't bother posting. Annoy other people or waste your time doing other things. . Btw as a experienced coffee shop owner keymoney is the reality unless the rest of you rob the stuff to get the chairs etc!!