I am beginning to sound like a broken record when talking and writing about this, but here it is. Start with a restaurant space! I say this over and over again, because I feel so strongly about it.
When I say start with a restaurant space, I don’t mean to do a restaurant, but rather a brewery. Sure, a restaurant space makes a lot of sense if you are planning a brewpub that serves food, but they also work great for a simple brewery taprooms well.
An existing restaurant would not be a change of use, meaning you are basically still operating a “food service establishment” and it will not trigger upgrades, architectural and engineering plans (in most cases) and will go through the various licensing agencies much easier than turning a warehouse into a brewery.
A restaurant will already have the things that cost so much - that customers don’t see - like HVAC, grease traps, parking, restrooms, office and cooler space, and most importantly floor drains. Also commercial hot water heaters and adequate electrical needs.
Restaurants are usually in good locations and already have decent signage you can repurpose.
Restaurants are usually - but not always - already zoned for alcohol.
Restaurants are plentiful. According to Modern Restaurant Management, restaurants fail at a rate of 60% in the first year and 80% in the first five years. There seems to always be a restaurant for lease close to you.
Where do you find these gems? Well, if you are in a small town you know where they are already. But if you are in a larger city like Houston or Baltimore, you could start with Craigslist. Look under commercial property for lease. Or under the business section. I also like to use Loopnet. There you can look for restaurants to buy the real estate, or just rent the space.
Another possibility is to purchase a restaurant that is already in business. This may sound crazy since you are not really interested in running someones restaurant, but let me explain. Even if you bought someones existing business for, say $100,000, you would typically only give them 20% down and the owner would carry the loan on the remainder: so no bank is involved. If you buy someones business the restaurant will not only have all the things I mentioned in the restaurant advantages above, but also have equipment you would need anyway, like kitchen equipment (if you are planning on a brewpub), perhaps a bar with sinks, taps, coolers, small wares needed in a tasting room, furniture and light fixtures.
Another attraction would be an ideal location. When I built Scalo, my Italian restaurant in Albuquerque in 1987, I bought an existing restaurant for $300,000. I wasn’t interested in it just because it was an existing restaurant, but also because the location was so excellent. $300,000 in 1987 is over $700,000 today and I shudder to think about that, but I was young and really had nothing to lose. Well, that restaurant lasted for over 30 years, so it was worth it.
On the other hand another Italian restaurant I started in Santa Fe in 1989, Pranzo, only cost about $85,000 to open. That’s because the restaurant was just for lease. That restaurant also lasted for 30 years. That is the ideal situation.
Our Colorado Boy Brewery in Montrose was an existing restaurant, so to add the brewery excluding equipment was only about $20,000 in construction costs. Whereas the Colorado Boy in Ridgway, had not been a restaurant and cost about $140,000 excluding equipment.
You know your area best so you also know the best places to look for a restaurant to use for your brewery. Spend the time to drive around those areas. Restaurants often close but they don’t show up on real estate ads, Loopnet, or Craigslist ads. You actually have to just see them.
It doesn’t have to fit into the perfect mold of a restaurant either. A small coffee house or ice cream shop could work. A movie theater too, as they are food service establishments. One of these days I will talk one of my students into converting a bowling alley into a brewpub. Just think of the excellent swag you could sell!
If you are lucky enough to find a restaurant, this will be your starting point. Everything else will fall into place quickly. You will have a more solid idea of what it will cost you to get open, and you will know exactly how much space you have available for your brewing equipment, which will tell you how much equipment you can buy.
Almost every time I see a restaurant for lease, I can imagine the type of brewery I would put in there. The opportunities are as unlimited as there are restaurants available. And, if you haven’t noticed, there are always restaurants available.