I currently own two restaurants. Both are pretty profitable, and are relatively easy to run. Keep that in mind as I tell you this: DO NOT GET INTO THE RESTAURANT BUSINESS. However, if you are stupid enough to still want to go through with it. I would be more than happy to answer any questions you may have. BTW, even though the business is easy to run, you still have to maintain a presence. I put in about 60-70 hours a week easily. If you own the property, it's always better for you because even if your business fails, you can still lease that out to someone else. In general, the monthly rent you pay to lease a location will be higher than a monthly mortgage payment. Goodwill also comes into play when you lease as the landlord can hold that as leverage when it comes time to negotiate a new lease (assuming your restaurant is successful). If it fails, unless you have a clause to allow you out of the lease (most leases won't), you will most likely be personally liable for the full terms of the lease (assuming the landlord makes you sign a personal guaranty, which will most liklely happen). Meaning, you sign a 10 year lease, and decide to shut down the place year 2, you still owe him years 2-10 if noone else rents the place during that time.
If you have to ask, you can't afford it. Starting restaurants takes a lot of money up front, the margins are generally thin, the chance of failure is high. If you don't either already have a ton of money or a ton of experience, you shouldn't even think about it. My wife owns a food-related business (see sig), which was pretty capital intensive even in a leased space -- and it's a small operation compared to a restaurant. I understand the wisdom is to have enough working capital to fund operations for the entire first year. I'll echo everyone else's sentiment not to do it. Put your money in the stock market, or baseball cards. If you are not deterred yet, and want to hear about our experience with leasing and capital, etc., you can email me through the board.
