the future of the hospitality industry
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Prior to 2008, the idea of renting out your home or room to a stranger was considered ludacris. Now AirBnb is a 31 billion dollar tech company.
Prior to 2013, the idea of delivering any other food than pizza or Chinese was unheard of. Now Doordash, UberEats, and Postmates are billion dollar companies.
The hospitality industry is in a similar transformation/evolution. Food halls, ghost kitchens, cloud kitchens, shared kitchens, pop up restaurants are on the rise.
The COVID-19 pandemic has forced thousands of small businesses to close their doors for good. Now, more than ever, the hospitality industry has to think "outside the box" and prepare for a new "normal". As takeout, curbside service and delivery become the new norm, the necessity for a full dining area has been greatly reduced.
We believe the pop up shop is the future of the retail/hospitality industry. Consumers don't blink an eye when they see a bank in a grocery store, or Amazon in Kohls. Why should consumers blink an eye when they see two entrepreneurs under the same roof?
Any business owner that has experienced the process of leasing a commercial location can tell you it is an expensive and stressful proposition. Let's assume you wanted to rent a modest 1700 sq. ft. space in a busy retail area. For prospective, Smoothie King and Subway are typically this size.
Using current market rates in our immediate area, the rent at a location of this size would easily be in excess of $5,000 per month (without utilities and expenses). If you're skeptical, just call.
Now let's take a look at a bakery/pasty/candy business. We can use Smoothie King and Subway as continuing examples. How often do you see patrons dining in at a bakery, candy shop, Smoothie King, or Subway? If you said "not often" you'd be correct.
Let's take a look at the economics of a lease:
Lease Down Payment/Security Deposit: $10,000-$15,000
Utility Deposits: $1,000 - $2,000
Finish Out: $10,000 - $25,000
Permits: $500 - $1500
Fixtures: $5,000 - $15,000
TOTAL UPFRONT INVESTMENT: $50,000.00+
These upfront costs do not include the fixed monthly costs of:
Grease Trap: $125
Fire Suppression Inspection/Maintenance: $100
Satellite Music/TV: $150
AVERAGE MONTHLY FIXED COSTS: $8,000.00+
If you're ready to take you business to the next level, we invite you to submit an application.