Industry same store sales are down for full service restaurants. Technomic reports 51% of consumers are cutting back and 14% are eliminating restaurant visits. In an industry where 60-80% of restaurant sales are contributed by frequent guests it’s no wonder many restaurants are experiencing severe sales decreases. So what is one to do? Beyond what you may be working on, renegotiate your lease.

Rent is one of your highest fixed expenses. For years it was assumed rent was non-negotiable once a lease was signed. Like everything else, times have changed. According to Moody’s Investors Service commercial real estate values have dropped 22.8% through March versus the October 2007 peak, 21% versus prior year (May 2009), and further declines are expected. Bloomberg.com reports Starbucks began in January seeking 20-25% rent reductions from its landlords. In that same report, Quiznos reported as many as 90 stores received a reduction of 15-20% in rent. By combining declining market rents and declining sales your landlord is expecting to hear from you regarding your rent structure. Click here to read more »