Pizzeria ProConnect

What to check before signing a lease for a pizzeria

Signing the lease is one of the most important commitments when opening a pizzeria. Once the contract has been signed, it can become very difficult and expensive to step back if the premises turn out to be unsuitable for the business.

Before committing, you therefore need to check the lease itself, the technical characteristics of the premises, the work required, the possible authorisations and the true cost of occupying the unit.

The objective is simple: avoid discovering after signing that you cannot install your oven, your extraction system or operate the premises as planned.

Check that pizzeria activity is actually permitted

The first point is to make sure that the lease genuinely allows your activity.

A broad description such as “commercial use” is not always enough.

You need to make sure the permitted activity covers what you actually intend to do: preparing and baking pizzas, dine-in service, takeaway, delivery and possibly the sale of drinks or other products.

If your concept later evolves, an overly restrictive permitted-use clause can become a problem.

Do not sign with a permitted use that is too vague or too restrictive

The clause describing the authorised activity is essential.

If it only states “takeaway pizza sales” while you also want to serve customers on site, the lease may not match your project.

Conversely, wording that is sufficiently adapted to the concept may give you greater flexibility.

When this point is important, it is sensible to have the clause reviewed by a legal professional familiar with the law in the country concerned.

Check that the building rules allow the activity

The lease alone may not be enough.

In a shared building, co-owned property or shopping centre, other rules may restrict certain activities.

You should check in particular for restrictions concerning:

  • foodservice activity;
  • cooking;
  • smells;
  • smoke;
  • noise;
  • opening hours;
  • deliveries;
  • installation of extraction;
  • changes to the façade.

A landlord may agree to your project while other building rules make it much more difficult.

Check extraction before signing anything

For a pizzeria, this is one of the most important points.

Never sign on the assumption that “the extraction can be sorted out later”.

Check:

  • whether a duct already exists;
  • whether it can genuinely be used;
  • its diameter;
  • its condition;
  • its route;
  • where it discharges;
  • whether it can be modified;
  • what authorisations are required.

Depending on the building and the type of oven, creating extraction may be straightforward, very expensive or impossible.

Do not rely only on what the landlord tells you

A landlord may tell you that “the extraction is compliant”, that “everything is ready for foodservice” or that “the previous tenant already had an oven”.

These statements need to be verified.

Ask for any available documents, have the installations inspected and check that the system is genuinely suitable for your future equipment.

A system that was adequate for a former snack bar may not be sufficient for your project.

Check the available electrical capacity

Before signing, ask what electrical capacity is actually available in the premises.

A professional oven can require substantial power, in addition to:

  • the mixer;
  • the pizza prep table;
  • refrigerators;
  • the cold room;
  • the dishwasher;
  • air conditioning;
  • ventilation;
  • lighting;
  • other equipment.

You also need to check whether the premises have the type of supply you need, particularly if some equipment requires three-phase power.

Cost any required electrical upgrade

If the current installation is insufficient, find out before signing how much an upgrade is likely to cost.

It may be necessary to modify the electrical panel, cabling or connection.

This work can represent a significant expense and may also involve delays.

The cost should be included in the budget before taking the premises.

Check gas supply if your project needs it

If you are planning a gas-fired oven or other gas-powered equipment, check whether a gas supply exists or can be installed.

You should also examine the applicable ventilation, flue and safety requirements.

Do not buy the oven before confirming that the premises are technically compatible.

Check water supply and drainage

A pizzeria requires several water points.

The sink area, hand-wash basin, dishwasher, cleaning facilities and sometimes other equipment all need suitable connections.

Check the location of water supplies and drains.

Poorly positioned drainage may require a large part of the system to be rebuilt.

Check ventilation and heat management

A kitchen with a pizza oven can become extremely hot.

The lease will not protect you from premises that are almost impossible to work in during summer.

You therefore need to assess general ventilation, whether air conditioning can be installed if necessary and whether heat can be evacuated effectively.

This also affects the performance of professional refrigeration.

Make sure the premises actually work with your intended layout

Before signing, create an initial layout.

Position the oven, mixer, pizza prep table, sink area, refrigeration, storage, counter and circulation zones.

Premises may look spacious during a viewing but become too small once all the equipment is installed.

You need to assess the genuinely usable floor area, not simply the advertised size.

Check storage capacity

A pizzeria often requires much more storage than expected.

You need space for:

  • flour;
  • drinks;
  • dough balls;
  • fresh products;
  • packaging;
  • pizza boxes;
  • cleaning products;
  • small equipment.

Premises with insufficient storage can become very difficult to operate.

Measure access before ordering equipment

Check the width of doors, corridors, staircases and passageways.

A professional oven, large upright refrigerator or cold room components must be able to get into the premises.

This may seem obvious, but it can become a serious problem on delivery day.

Check what work you are allowed to carry out

The lease should specify what you can and cannot modify.

Some work may require the landlord’s approval.

Other work may be prohibited or subject to specific conditions.

Before signing, check what is possible regarding:

  • extraction;
  • façade;
  • signage;
  • terrace;
  • utilities and services;
  • walls;
  • floors;
  • ceilings;
  • air conditioning;
  • external equipment.

Determine who pays for the work

Not all work is necessarily your responsibility.

Depending on the contract and the country, some repairs or obligations may fall to the landlord while others fall to the tenant.

This allocation needs to be understood before signing.

Premises with attractive rent may become far less appealing if you are responsible for major work linked to the building structure.

Obtain quotations before signing

A rough estimate is not enough.

Bring in the professionals you need: electrician, plumber, refrigeration specialist, extraction specialist, professional kitchen designer or architect depending on the project.

This will allow you to estimate the true installation cost.

A few hundred euros spent on inspections or surveys can prevent a mistake costing tens of thousands.

Check any work required before opening

Some premises may need adaptations relating to accessibility, safety, toilets or technical installations.

These requirements depend on the country, city and type of establishment.

You therefore need to identify mandatory work before signing.

Do not rely only on the current condition of the premises.

Check the rules for premises open to the public

If you plan to have a dining room, additional requirements may apply.

Accessibility, toilets, exits, fire safety, occupancy limits and circulation can all affect the layout.

Premises that are suitable for takeaway may not necessarily be suitable for a restaurant with several dozen seats.

Check signage possibilities

A good frontage can be a major advantage.

But make sure you can actually install the signage you are planning.

The landlord, building rules or local regulations may impose restrictions on dimensions, colours, position or lighting systems.

It is better to know this before finalising your visual identity.

Do not assume a terrace is guaranteed

Even if there is space in front of the premises, you may not automatically be allowed to place tables there.

Specific permission may be required.

The terrace may also be limited in size, opening hours or periods of use.

Do not build your sales forecast around terrace seats that have not yet been secured.

Check permitted opening hours

Your concept may depend on late trading.

Check whether the lease, building rules or local regulations impose restrictions.

A pizzeria that generates most of its sales in the evening needs to make sure its operating hours are compatible with the surroundings.

Analyse potential nuisance issues

Smells, noise, customers leaving, delivery scooters and waste handling can all create neighbourhood disputes.

Nearby residential units, particularly directly above or next to the premises, should be taken into account.

A commercially attractive unit can become difficult to operate if nuisance risks have not been anticipated.

Check delivery arrangements

Your suppliers will need regular access to the premises.

Make sure there is a reasonable way to unload goods.

Also check any restrictions on delivery times or vehicle access.

Receiving dozens of flour bags or a pallet of drinks on an inaccessible street can become extremely restrictive.

Check waste management

Look at where cardboard, food waste and other refuse will be stored before collection.

Also check the collection arrangements that apply in the area.

This needs to be possible without blocking the kitchen or creating hygiene problems.

Analyse the rent carefully

The rent should be compared with the actual commercial potential of the premises.

Do not assume that an exceptional location automatically justifies any rent level.

Your business plan should show that the expected turnover can absorb this cost.

The higher the rent, the higher your break-even point becomes.

Look at how the rent may increase

Do not focus only on the first-year amount.

Read the indexation or review clauses included in the contract.

A rent that feels manageable today can become much heavier after several years.

This is particularly important with a long lease.

Identify all additional charges

The monthly cost of the premises may be much higher than the advertised rent.

Check in particular:

  • shared building charges;
  • recharged taxes;
  • maintenance;
  • insurance;
  • management of common areas;
  • waste charges;
  • shared heating or air conditioning;
  • any other contributions included in the lease.

Where possible, ask for the amounts actually paid in previous years.

Check the security deposit

Look at the amount required and the conditions for its return.

It represents cash that will be tied up.

It should therefore be included in the financing plan from the beginning.

Check any entry costs

Depending on the country and situation, there may be various additional costs: lease premium, key money, agency fees, equipment takeover costs or other charges.

They should all be clearly identified before signing.

Do not look only at the rent.

Check the length of the lease

The duration of your commitment needs to match the project.

You may invest tens of thousands of euros in fitting out the premises.

You therefore need to understand how long you can operate there and under what conditions.

Heavy investment in premises with an insecure contractual position deserves particular attention.

Look at exit options

Consider what happens if the project does not work or if you want to move.

What are the termination conditions?

Are there specific break dates?

Can you assign the lease?

Can the premises be transferred when the business is sold?

These questions may seem secondary before opening, but they become essential if circumstances change.

Check the conditions for assigning the lease

If you sell your pizzeria one day, being able to transfer the lease may become very important.

Some clauses can strongly restrict assignment.

You should therefore check the applicable conditions and any approvals required.

Look at the guarantees being requested

The landlord may require different forms of security.

A personal guarantee, large deposit or other commitments may be included.

You need to understand exactly what you are personally agreeing to.

A personal guarantee can continue to have financial consequences long after signing.

Check whether the lease includes exclusivity

In some commercial developments, a clause may restrict or protect certain activities.

An exclusivity clause preventing another pizzeria from opening nearby can be valuable.

Conversely, make sure that exclusivity already granted to another business does not prevent you from operating.

Check whether competitors could open next door

In a shopping centre or a group of premises owned by the same landlord, ask whether a neighbouring unit could be rented to a direct competitor.

This is not necessarily a reason to reject the premises, but it may be something to negotiate.

Check the history of the premises

If several restaurants have closed quickly at the same location, try to understand why.

It may be due to poor management, but it could also indicate a structural problem: weak footfall, difficult parking, nuisance issues or excessive costs.

Premises with frequent tenant turnover deserve closer analysis.

Ask for previous bills or consumption data where available

If the premises were previously occupied by a restaurant, some figures may be useful.

Electricity use, gas consumption, service charges or the history of previous work can help you build a more realistic budget.

They may also reveal unusually high consumption levels.

Check any equipment being taken over

If equipment is remaining in the premises, make a precise list.

The oven, extraction hood, cold room, dishwasher, furniture and refrigeration equipment should all be identified.

Check who actually owns them, their condition and whether they are included in the lease or takeover agreement.

Never assume that visible equipment is automatically included.

Check who owns improvements you pay for

In some leases, improvements funded by the tenant may remain in the premises when the lease ends.

You need to understand what happens to the installations you pay for.

Extraction, air conditioning, partitions or other works may represent substantial value.

Consider negotiating a rent-free period

Where substantial work is required, it may be possible to negotiate a rent-free period or reduced payments at the beginning.

This obviously depends on the market and the landlord.

But every month of rent saved while work is being carried out helps preserve working capital.

Try to make your commitment conditional on essential checks

Where legally possible in the country concerned, certain commitments may be made subject to important conditions.

For example: obtaining finance, receiving approval for work or validating an essential technical element of the project.

These clauses need to be drafted correctly.

It is better to obtain professional advice than to rely on improvised wording.

Do not sign simply because you like the premises

An attractive frontage and a strong first impression do not replace technical and financial checks.

Before signing, you should be able to answer these questions clearly:

  • Can I legally operate a pizzeria here?
  • Can I install my oven?
  • Is extraction possible?
  • Is the electrical capacity sufficient?
  • Are the premises large enough?
  • How much will the work cost?
  • Can my projected turnover realistically support this rent?

If several of these answers are still unknown, it is probably too early to sign.

Have the lease reviewed

A commercial lease can commit your business for several years and may contain clauses that are difficult to understand.

The cost of professional review is small compared with the potential consequences of a problematic clause.

As the rules vary significantly between countries, it is preferable to have the contract reviewed by a professional familiar with the law that applies where the pizzeria will operate.

Use a checklist before signing

Before signing, check at least:

  • pizzeria activity permitted;
  • permitted use under the lease;
  • building regulations;
  • extraction;
  • electrical capacity;
  • gas if required;
  • water and drainage;
  • ventilation;
  • equipment layout;
  • storage;
  • toilets;
  • accessibility;
  • safety;
  • façade and signage;
  • possible terrace;
  • opening hours;
  • deliveries;
  • waste;
  • rent amount;
  • indexation;
  • additional charges;
  • security deposit;
  • required work;
  • exit conditions;
  • assignment conditions;
  • any personal guarantees.

In summary

Before signing the lease for a pizzeria, you need to check that the activity is permitted, that the premises are technically suitable and that the financial terms of the contract are compatible with your project.

Extraction, electrical capacity, required work and the permitted use under the lease are particularly important, because a problem with any one of them can put the entire project at risk.

You should also take the time to analyse the rent, additional charges, lease duration, exit options and any guarantees being requested.

The time to discover that extraction is impossible, that the oven cannot be powered or that the lease does not allow your activity is not after signing. Anything that could prevent you from opening should be checked before you commit.