Opening a fish and chip shop - Looking for views/Opinions

...and extras like botulism, salmonella and listeria.

 

Never forget the lids - if you follow the links you'll find I included the lid price

What I don't understand is that, rather than charging 20-50c for a container of sauce, and having people go WTF ... why don't you simply charge an extra 20c per serve and chips and have "free" sauce ... people remember the free sauce, not the extra 20c for the awesomely double cooked chips

 

Looking for some input please.

I have a premises in mind (Empty shop) No fit out currently for a takeaway just bare bones. This is 78m2. There's a business that has just come on the market (2 door down) Currently trading as a restaurant and is 100m2. Rent difference is about $600 a month. It is currently being run under management with no input from the owner. I know it would be a safer option to take over the restaurant - everything is there apart from some fryers. Grease trap there, toilets there etc.

Of course opening a brand new shop will get the interest up/buzz from locals but it could be a 'safer' way in buying the established place. I could get in there, trade as is and then introduce what I want as time goes on.

The owner is moving back to India and wants $75,000 for the business. I'm estimating going with the other shop, with buying equipment and fit outs we would be looking at that at least.

 

im not a psychologist or consumer behaviour expert, but maybe the 20c difference might be the difference between been seen as appropriately priced vs a little expensive, especially if there is one next door

 

I reckon people wont miss the extra 20 cents

 

Looks like I'll be buying fish & chips for dinner tonight now that this tread has made me crave them for the first time in years.

 

I assume when you say the difference in rent is $600 per month you are talking about the restaurant being more.
- What are the lease terms like?
- Have you had a proper look at the equipment (age/condition) and do they seem suitable? - - Are you reasonably sure most of the equipment you will need is there?
- Is there suitable space for your potato tumbler and chipper?
- Is there suitable space for washing/cleaning/shelling fresh seafood?
- Do they have coolrooms to suit your needs? - - Will the lease allow you to convert the restaurant to a fast food shop?
- Currently a restaurant, does the premises have a huge front seating area and a little back/kitchen area? (Can the partition wall be moved cheaply if the back is too small or is a solid brick partition like the older style buildings?)
- How is the decor of the place? (old cheap looking/will it need a reno?)

The reason I ask these questions is because although sometimes it may seem like the quicker cheaper route is to buy an established place, if it's not suitable due to wrong equipment, lease terms, poor layout etc it can be more costly to change everything as opposed to starting from scratch.

Just my thoughts.

 

100m2 is large for a fish and chip shop. Having said that I would only ever take over an existing food business as converting a blank shop is very expensive last one I did was $150k which was doing a lot of work ourselves. I don't think you could fit out a food business for 75k with council plans
and requirements. Just the pluming required for a food outlet will blow your mind, add in r11 vinyl, coldroom, freezer room, sinks, minimum hot water requirements. All of the fire requirements for behind fryers etc it's a cost nightmare.

If everything checked out I wouldn't change it over time, I would close for a week, put up your new signage and reopen as a fish and chip store. I think slowly changing is confusing and will set you back.

There would be a lot of considerations taking over a lease, some of which York has hit spot on plus many others. As I said happy to assist if you would like just message me

 

http://www.perth.wa.gov.au/sites/default/files/Food Business Construction Guidelines.pdf

Fitout guidelines to give you some idea of the scope for a new site

 

Pretty much!

however I think, making small changes initially is part of the process, part of growing and adapting to the market.
I find with food businesses, you could have 2 idential shops next to eachother, and one will be more busier then the other, for no apparent reason , nor could any consultant point out,

sometimes its first come first served, sometimes its the newcomer is the better, sometimes its luck, sometimes its just a trend for no reason

unfrotunately its pretty much trial and error for the most part,

so if you do fail, dont be too harsh on yourself unless you screwed up fundamentally
so if you do succeed, dont get too cocky and think you have reinvented the wheel

 

Yes the restaurant is $600 more. The current lease has ended and a new five year lease is available at $43,200.00 pa plus GST plus outgoings of approximately $7,000.00 pa. I'm going in tomorrow to chat to the seller and will have a look at all the equipment that's available and whether there is suitable space for the additional equipment I will need. It is adequately decorated although it's interior is very dark and I was looking at having light/brighter colours but I'm sure this can be adjusted with some effort.

 

I met the seller of the established restaurant on Saturday. I looked at all the equipment and even though it has enough to carry on as is I would need to purchase more fryers,fridge/freezer and the rumbler/chipper. Estimated cost would be around $15k for these. Most items are around 3-5 years old. He's looking for $75k for the business (Estimated equipment value only) and currently has staff in there running the place. There are no financials available as he has been running 2 businesses under the one ABN so apparently it is impossible to separate the financials from each business. Presently it is breaking even (according to him) I'm trying to find comparable sales and found this:

Cafe/Coffee Shop Business for Sale in Mount Lawley WA - North East Perth (3089205) | AnyBusiness

It's exactly the same area size and in Mount Lawley with a price of $50k. I believe he is asking too much.

I've no experience in valuing equipment (or a business) so a bit stumped on where to go from here.

 

Thats an extreme example due to the way over the top lease. $780/m2 + outgoings +GST is just not going to be sustainable.


Don't worry about valuing his business according to market norms etc. Simply work out the numbers based on what the max is you can afford to make the project viable.

 

Hi, you seem knowledgeable about the industry could you give me your thoughts please?
We have run a small take away, fish chips burgers etc. in a small complex tha t houses accountant, vet etc in a suburb of Moonee Beach North of Coffs Harbour. It is survivng is a term used to describe it.
3 and half years and lease is up. aAbout 400m away is a shopping complex anchored by Coles. Our delema is is it worth the cost of increased rent to be in the complex as opposed to being a stand alone?
I know this is a hard question without specifics, but your thoughts in general would be appreciated.

 

Hey John, two questions: 1. What would the cost be to move the store- assuming you would need to fit out from scratch you won't get out under 80k?. 2. Why in your opinion is it just surviving? I think this is critical to decide if a move would be the answer? Feel free to PM me if you like.
Chris

 

Also worth asking...

1. Are you going to be required to trade extra hours that will not increase profits or worse could cost you money? (lots of centres require specific opening hours) Alternatively, will you be able to be open for the same times? Some centres close early and might restrict dinner sales.

2. Does a Coles actually bring you increased clientele? How many people go to Coles to do the shopping and then go for a burger? As opposed to going to the accountant and then grabbing lunch or grabbing a bite while the dog is in the vet type scenarios? Will you actually increase sales?

3. How many more sales are you going to need a week to cover the additional rent, is this possible and will it bring with it additional expenses that need to be considered.

4. What's the competition like at the new and existing locations? You might be the only food place at the current location but might be competing with a kebab shop or something at the other spot.