Hotels and Restaurants

A do-it-your-self owner typically does not hire a professional project consultant or a design-build team until it is very late.  The reason – he believes, the consultant will be cost prohibitive.  In reality that would be the wisest money spent regardless of how intangible it may seem at the moment.  It may perhaps save you from purchasing the land or signing a lease agreement and prematurely start the meter on the mortgage or rental payment.  On the other hand, the entrepreneur may be rushed into signing a leaase, hiring an architectural and engineering consultant to provide drawing and permitting services without first getting a wingman to help him.

In such a scenario, the project lacks a single point-of-contact person with substantial background in design and development knowledge and a keen sense of translating the owner’s vision in to reality.  All other technical consultants that are hired will only provide what their limited contracts state.  The end result is a hodgepodge with escalating budgets and out of control project timeline.

A savvy entrepreneur, who has done his homework, will familiarize himself with all the steps and conclude that going with a project consultant or a Design-build team is a logical step.  This is especially true in the hospitality industry where the owners of a new project are expert operators or Chefs with extensive experience.

When should the project timeline begin?  What are the milestones?   Making the right choices the first time can save you from making expensive mistakes throughout the project –

  In our opinion, the time-line should start at the very occurrence of the idea of undertaking a restaurant or hotel project.  After all, you are starting your dream project. 

The first milestone is to reach a solid decision on what type of service and product to offer based on a thorough demographic and market research.  The second milestone is a successfully negotiated land purchase or lease agreement.  Sufficient time should be incorporated within the purchase or lease agreement to compensate for any contingencies.  Time should be provide in the project timeline for design and permits, food and beverage license, liquor license in case of a Bar restaurant, operator permit and various other components including time for construction.  Time should be allotted for dealing with financial institutions in case of funding the project through loans.

Getting the project constructed is the easiest part.  Making sure that every aspect of your dream is covered, putting it on the paper and getting the design approved by everyone concerned including building permit department and health department  is the hardest.  Give yourself sufficient time before the rent or mortgage meter starts ticking.  Make sure you have escape clauses and options in the agreements provided the project is not going as per your plans.

As always, a good legal advisor should be consulted.

We will deal with project timeline for ground up project in the next post.