Chapter 6 — Further Reading

Sources are grouped by how confident we are in them, following the book's citation policy: Tier 1 are works and institutions we are confident exist and can stand behind; Tier 2 are real ideas and practices whose exact publication we have not pinned down; Tier 3 is constructed teaching material in this book, labeled where it appears.

A note before the list. This is the chapter where the gap between a textbook and a professional is widest. Nothing below is a substitute for a commercial real-estate attorney who practices in the jurisdiction where the building sits, and none of this chapter is legal advice. Read to become a client who asks good questions, not to become your own lawyer.

Tier 1 — Verified canonical

Roger Fields, Restaurant Success by the Numbers. The financial-reality reference for this whole book, and its treatment of occupancy cost as a percentage of sales — and of what happens to that percentage when revenue disappoints — is the argument of §6.4 arrived at independently.

Douglas Robert Brown and Elizabeth Godsmark Rowe, The Restaurant Manager's Handbook. Encyclopedic on site selection, lease terms, and the build-out sequence. Use it to look things up: the checklists are genuinely useful when you are standing in an empty space with a notebook.

The Americans with Disabilities Act (ADA). A real federal statute imposing obligations on places of public accommodation, with distinct requirements attaching to alterations of existing facilities. It is directly relevant to any second-generation conversion, and it is enforced independently of whatever your local building department says. The U.S. Department of Justice publishes accessibility standards and guidance at no cost. Chapter 8 covers compliance in detail; budget for it here.

The FDA Food Code, and the fact that states and localities adopt versions of it. Relevant to this chapter because health-department plan review — sink counts and locations, floor drains, finish schedules, equipment layout, ventilation — frequently gates the building permit and is the step first-time operators most often discover late. Verify your own jurisdiction's adopted version and its plan-review process before you budget a schedule.

The COVID-19 dining-room closure orders of 2020 and their aftermath, including the Paycheck Protection Program and the Restaurant Revitalization Fund. Documented public record and the subject of Case Study 1. Read the trade press and legal commentary from 2020–2022 on force majeure, impossibility, and frustration of purpose in commercial leases — but read it for the structure of the arguments and the variation in outcomes, not for a rule you can apply.

Your own jurisdiction's zoning ordinance, building department, and health authority. These are free, public, and specific to you, which makes them more valuable than anything else on this list. Most building departments will hold a pre-application meeting. Most health authorities publish their plan-review checklist. Ask for both before you sign an LOI.

Tier 2 — Attributed, specifics unverified

Occupancy cost benchmarks of 6–10% of sales for full service, with under 8% as a working target, are industry rules of thumb appearing consistently across trade publications, brokerage commentary, and operator convention. They are not the output of a single definitive study and they vary materially by market, service style, and whether utilities are (incorrectly) included. Use them for orientation and build your own from Chapter 31.

The 10–15% construction-contingency rule of thumb and the 8–15% range for net change orders on a second-generation restaurant conversion are practitioner experience and trade convention, not published statistics. Treat them as planning numbers rather than predictions. Older buildings, incomplete drawings, and unknowns on the inheritance inventory all push both figures up.

Restaurant build-out costs per square foot vary so enormously — by market, by finish level, by whether infrastructure is reusable, by whether the work is union — that any single national figure is misleading. Bellwether's \$110.71 per square foot is a constructed illustration of a modest second-generation conversion, not a benchmark. Get three local bids; that is your number.

Lease structures, the prevalence of good-guy clauses, and holdover penalties differ substantially by market. Good-guy limitations are common in some American cities and essentially unknown in others. Percentage rent is standard in enclosed malls and unusual in street retail. Do not import a practice from a book, a podcast, or another city into your negotiation without asking a local broker and a local attorney whether it is a normal ask where you are.

Commercial brokerage compensation is customarily paid by the landlord as a percentage of lease value, with a tenant representative's share typically drawn from the same pool. Structures vary; ask directly and get the answer in writing.

Tier 3 — Illustrative / constructed (labeled in text)

The Rivermill site and block in Figure 6.1, including the traffic figure, the parking counts, the neighboring businesses, and the daypart read, are constructed. Rivermill is a fictional district in a fictional mid-size Midwestern city.

The Bellwether lease in every figure and table of this chapter — \$28 base, \$6 NNN, \$95,200 all-in, the step escalation, the \$75,000 tenant-improvement allowance, three months of abatement, and the full personal guaranty — is a constructed teaching example, internally consistent and realistic, attached to no real property.

The inheritance inventory (Figure 6.2), the lease abstract (Figure 6.3), the construction budget (Figure 6.5), the change-order log (Figure 6.6), and the critical path (Figure 6.7) are all constructed artifacts built to be analyzed. Their arithmetic resolves; their contents are illustrative.

The escalation comparison, the percentage-rent calculation, the CAM true-up, and the required-revenue inversion in §6.4 all use Bellwether's constructed figures. The math is real; the restaurant is not.

Case Study 2 is explicitly a composite, assembled from recurring industry patterns. It is labeled as such at the top of the file.

Where to go next

Chapter 7 is the mandatory sequel. It takes the 2,800 square feet this chapter committed to and converts it into seats, stations, an equipment schedule, and a revenue ceiling — and it prices the hood, the make-up air, and the grease interceptor that §6.3 discovered. Do not read them apart.

Chapter 8 carries the permit path forward into the operating licenses: entity, certificate of occupancy, health permit, liquor license, and insurance. The liquor timeline in particular frequently determines whether the schedule in §6.7 is achievable at all.

Chapter 33 is where the cash consequences of everything in §6.6 and §6.7 land. If Case Study 2 worried you — and it should — Chapter 33 is the chapter that turns that worry into a thirteen-week forecast.

Chapter 39 is where the personal guarantee stops being theoretical, and it covers lease renegotiation, assignment, and termination. Read it before you sign, not after. It is the most useful thing in the book to have read early and never needed.