How to afford this business?

[tloonya]

Watched this show for the second time. State Wisconsin this time.
Don't remember what state was before...
2 teams are fighting to win a restaurant at the mall rent free for a year.
For that they are supposed to oursell each other.

Second time I am watching and both teams are making little over $1K
per day. And the rent is $100K per year!!!!!!!

So I am having a rent that is nearly $20K per year and I make more then they
making daily and there is no freaking way it is a happy end!

Also mind you these restaurants are having people lined up and waiting
because TV made them promotion like only TV show team can!
There is no down time, it is just how fast they are serving.

So what is wrong with this picture?
Can you really afford a $100K rent business with $1K daily sales?

[swamp]

Yes, if you don't have any overhead.  

[hoops902]

They are massively overstating the "rent".  Usually rent is a base amount (like 1-2K) plus a % of sales or a percent over a certain amount or something.  I have seen the show, i don't remember seeing 100K advertised as the rent.  But if it is, they're probalby projecting unrealistic sales numbers.  Or they're figuring in all the signage, machines, buildouts that are occurring to get them seet up.

[tloonya]

Sept 9, 2013 14:19:43 GMT -5 swamp said:

Yes, if you don't have any overhead.  

So far 2 people team had 2 helpers each, so there are 2 salaries right there.

I am not sure if rent in the Mall has everything included.

Also that $1K sales is going to be used to buy ingredients to cook, right?

I am not sure about restaurant mark up though...or food court

If it is even 100% it means they had only made $500/day.

So it is $15K per month. Minus salaries and whatnot...how great is it?

[tloonya]

Sept 9, 2013 14:22:10 GMT -5 hoops902 said:

They are massively overstating the "rent".  Usually rent is a base amount (like 1-2K) plus a % of sales or a percent over a certain amount or something.  I have seen the show, i don't remember seeing 100K advertised as the rent.  But if it is, they're probalby projecting unrealistic sales numbers.  Or they're figuring in all the signage, machines, buildouts that are occurring to get them seet up.

First time I had not heard rent numbers.
But yesterday he said it loud and clear that they won $100K in free rent!
My Q:
How does anyone can have rent as a base amount (like 1-2K) plus a % of sales? Who is standing and watching how much sales were? And who will tell whom the truth?  

[Sum Dum Gai]

$100k in free rent might be several years worth of rent not necessarily just one.

[Deleted]

Sept 9, 2013 15:18:07 GMT -5 Sum Dum Gai said:

$100k in free rent might be several years worth of rent not necessarily just one.

Nope, she is right... Just one year. I googled it:

www.foodnetworkgossip.com/2013/07/food-court-wars-premieres-sunday-first.html?m=1

The premise of the show is that two teams compete against each other with the winner getting a space for their restaurant in a local mall rent-free for a year, which is valued up to $100,000.

But even that doesn't seem to help...

Despite the episode being filmed in August, Kettle n' Spouts closed either in late February or early March. The restaurant also stopped updating their Twitter and Facebook pages on February 22nd, and gave no reason to why they closed. People were questioning what happened, but there have been no responses from the restaurant. Not sure why you would close a restaurant that was rent-free before the year lease ran out, but I can't find a reason why it was closed.

The mall locations set to appear on this season of Food Court Wars are: Meridian, MS, Spartanburg, SC, Midland, MI, Burnsville, MN, Wausau, WI, and Charleston, SC. I will keep an eye out to see if the winning restaurants face the same fate as Kettle n' Spouts or if they succeed. I wonder out of the six new ones, how many will renew the lease after a year (if they make it that long)?

[Abby Normal]

Never seen the show, but I would interpret "making 1K per day" as profit not gross.

If they win- they have the option of establishing themselves in the mall rent free then move the business to another location where the rent is cheaper.  

[Deleted]

you still need capital.....

you need to build out the space

you need to have enough to cover 4-6 months of low sales and high expense

most people have the dream, and maybe even the work ethic

what they lack is the business acumen....and the knowledge of what it takes to make one successful

[Deleted]

Never seen the show either... Our rent here is 98k/month but we are a grocery store.

So 100k/year for a restaurant in a mall does not seem that excessive or out of the realm of possibilities to me. That is only about ~$8,333/month.

Utilities run us about 35k/month, another 15k/month for internal/external and technical maintenance; common area maintenance another 5k/month.

Who wants to own their own business again? Owning your own business is not for the faint of hearts, there is a reason that 50% don't make it past the first 5 years.

[hoops902]

::So 100k/year for a restaurant in a mall does not seem that excessive or out of the realm of possibilities to me. That is only about ~$8,333/month.::

It's not really a "restaurant" though, it's a little booth in a food court.

::Never seen the show, but I would interpret "making 1K per day" as profit not gross.::

Either way though, for the show their only expense is food cost.

::Not sure why you would close a restaurant that was rent-free before the year lease ran out, but I can't find a reason why it was closed. ::

These people aren't necessarily already running a full time food business.  So even if you're getting free rent, if you're only just breaking even and not taking a salary...it's probably worth closing up shop and going back to working for someone else.  You could give me free retail space here in town somewhere for a year, I'd probably say no thanks and keep my job.

[Abby Normal]

Sept 9, 2013 16:01:07 GMT -5 hoops902 said:

It's not really a "restaurant" though, it's a little booth in a food court.

So greasy, barely edible food if you can call it that.  I'm surprised them make 1K a month.

[Deleted]

1 k gross or net?

[tloonya]

Sept 9, 2013 16:15:29 GMT -5 oped said:

1 k gross or net?

What theisales per day, so it is gross.

cawai, you are comparing a supermarket to a mom-pop chew stop? Stop! Really! Thanks for googling though.
 
I have NO idea why these resaturants closing after a few rent free month, I would say TV publicity is going on and they have a TV freebee famouseness, what ta heck! And so far I saw professional people there who had been low on luck. Idk. Weird. I will watch 'Casual Joe's' place to see if they are going to make it. If I have time of course...or you can watch it for me, you seem have plenty of time

[tloonya]

Sept 9, 2013 15:18:07 GMT -5 Sum Dum Gai said:

$100k in free rent might be several years worth of rent not necessarily just one.

you are such a rebel, you are....aren't you? Always 'assuming' people wrong...how are you gonna deal with your toy customers I have no idea! 'I want a beach ball'...'No, you are probably want a volleyball'....NO, BEACH!BALL!...

[Sum Dum Gai]

The premise of the show is that two teams compete against each other with the winner getting a space for their restaurant in a local mall rent-free for a year, which is valued up to $100,000.

See that bold part.  It doesn't mean the specific place they're getting in the mall actually costs $100k a year.

you are such a rebel, you are....aren't you? Always 'assuming' people wrong...how are you gonna deal with your toy customers I have no idea! 'I want a beach ball'...'No, you are probably want a volleyball'....NO, BEACH!BALL!...

I don't sell beach balls or volleyballs.

[Deleted]

Sept 9, 2013 21:24:41 GMT -5 Sum Dum Gai said:

The premise of the show is that two teams compete against each other with the winner getting a space for their restaurant in a local mall rent-free for a year, which is valued up to $100,000.

See that bold part.  It doesn't mean the specific place they're getting in the mall actually costs $100k a year.

[alabamagal]

I watch the show and enjoy it.  Especially as an owner of a small business.

They take two people who want to go into food court business and they compete to win the spot with free rent for a year.  The places are pretty much ready to go, although it might need some modifications.

They people who compete are not necessarily good business people, nor do they necessarily have good customer service skills.  But if you , make $1000 a day gross, you should easily be able to afford to pay staff, food costs, utilities, etc., and possibly grow your business.  But if you are a bad businessperson, hire bad employees, have bad customer service, sell bad food, and don't pay your sales taxes, you will get shut down.  Just because you have free rent doesn't mean you will succeed.

[tloonya]

Sept 10, 2013 9:29:55 GMT -5 alabamagal said:

I watch the show and enjoy it.  Especially as an owner of a small business.

They take two people who want to go into food court business and they compete to win the spot with free rent for a year.  The places are pretty much ready to go, although it might need some modifications.

They people who compete are not necessarily good business people, nor do they necessarily have good customer service skills.  But if you , make $1000 a day gross, you should easily be able to afford to pay staff, food costs, utilities, etc., and possibly grow your business.  But if you are a bad businessperson, hire bad employees, have bad customer service, sell bad food, and don't pay your sales taxes, you will get shut down.  Just because you have free rent doesn't mean you will succeed.

I am dying to know how to afford to do everything above mentioned with daily sales of $1K.
You have to remember that you have to live somewhere as well and be able to pay YOU to be able to pay your living...and if you have no spouse who pays that from his/her paycheck from another job...
It is easier to say...