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Second-Gen Spaces: Know What You’re Getting

Unfortunately, and as expected, the pandemic led to the closure of many restaurants. Practically speaking, though, that means when looking to add stores or even open their first units, operators can choose from many second-generation restaurant spaces, including some highly desirable locations.

While this real estate can present a good opportunity for operators, they should be careful to evaluate each space’s infrastructure and legacy equipment to ensure it meets their needs and doesn’t present unexpected expenses and delays.

One area operators should pay particular attention to is a space’s utilities. According to Paul Pumputis, service manager for New York state-based service agency Duffy's AIS, gas lines in second-generation restaurant spaces represent a common cause of trouble in these situations. “[Operators] need to make sure that what is in the building is capable of handling the amount of Btus they plan to use for gas,” he says. “If they are going to add equipment in this space or remove equipment [left behind by the previous occupant] and add units with higher Btus, they definitely want to make sure what they have is ample for what they want to use it for.”

One warning sign is a mismatch between the previous concept and the concept moving into the space. If a pizza place, for instance, takes over a location previously occupied by a coffee shop, the facility probably won’t have a big enough gas line to fire the pizza ovens.

In some cases, the mismatch can be large enough that new lines from the manifold will have to be welded. “Now they would have to schedule a welder, and plan on shutting down the gas for a good length of time,” Pumputis says. “It is a process. If they plan on being open at that time it is going to be difficult.”

This outlay may be worth it, of course, but operators should go into the situation with open eyes. Pumputis suggests consulting with a good professional plumber who can calculate Btu loads and gas line supplies when evaluating a space.

Similar issues can arise on the electric side, though not as often, Pumputis says. If the restaurant moving into the space will use new or more powerful equipment, it’s worth hiring an electrician to evaluate the location’s electrical capacity before moving forward.

On the water side, supply is rarely an issue. Hot water sanitation may require a bump up in hot water supply but that is a relatively easy fix, says Pumputis. If operators want to use steam equipment in a space that they hadn’t before, though, they should have the water tested and develop a water filtration/softening plan if necessary.

In addition to utilities, operators should evaluate any equipment left behind that they plan to use. Walk-ins, for instance, often get reused. But not all walk-ins are the same. It’s not even a matter of walk-in cooler vs. freezer, Pumputis notes. “I’ve got customers...who’ve built a freezer specifically for meat. It was never intended for holding ice cream, so it doesn’t get as cold. If you plan on filling it with ice cream, make sure it is capable of getting to temperatures to keep it nice and solid.”

Remaining hoods can be another issue, Pumputis states. As simple as it sounds, operators should pay attention to the hood’s linear footage. If they plan on adding or swapping out equipment on legacy cooklines, operators should make sure the hood is sized to accommodate the changes, says Pumputis.

Finally, operators should be careful to evaluate any legacy equipment that they plan on using. If the units are dirty and operating poorly, they should be serviced. Equipment that is working well doesn’t give operators a get-out-of-service-free card, Pumputis says. “If the equipment looks good and runs well it was likely well maintained. Keep that up because otherwise you will run into problems quickly. Don’t assume that the equipment just happens to be in good shape,” he says.

Moving into a second-generation space can be a good opportunity for operators. The real estate may be desirable, and the legacy infrastructure and equipment could save them thousands. But these aren’t guarantees. By working with service agents and reputable companies in the trades, operators can find out just how good of a deal they are getting.