A café owner and adviser review a floor plan in an empty restaurant.

Before you sign a café or restaurant lease: premises due diligence

Before committing to a café or restaurant premises, check that your proposed operation is permitted, technically feasible and affordable at that particular site. Bring the lease, approvals, building services and opening budget into one decision. A promising location is not ready to sign while a critical assumption remains untested.

This guide is for an owner comparing empty premises or taking a new lease over an existing hospitality space. It provides an evidence-gathering process, not a lease review or building certification. Use a lawyer experienced in the relevant state's retail or commercial leasing rules, an accountant and appropriately qualified building and services advisers before making a binding commitment.

Describe the business before assessing the building

Write a one-page operating brief before arranging technical inspections. State the proposed menu, cooking methods, opening hours, seating, takeaway activity, delivery collections and any alcohol service. Include the busiest service you intend to accommodate, not just the quiet opening week.

Explain the difference between what is essential and what can change. For example, a breakfast café may need hot cooking from day one but be willing to postpone evening service. A restaurant whose concept depends on a particular cooking appliance should not treat approval for that appliance as a later detail.

Give every adviser the same dated brief. Otherwise, the landlord might discuss a coffee shop, the designer might draw a full kitchen and the accountant might cost a light fit-out. Those are three different businesses occupying the same address.

For the wider opening sequence, use the café startup checklist. Keep this review focused on whether to commit to the premises.

Request an evidence pack

Ask the landlord or agent for the proposed lease and disclosure documents applicable to the transaction, available approved plans, relevant approval references, equipment ownership information and the details of any proposed landlord works. Request service and maintenance records for equipment that is part of the offer.

Make a document list with four fields: item requested, person responsible, date received and unresolved question. Receiving a file is not the same as confirming what it allows. A drawing labelled “proposed” may not be an approved plan; an appliance in a photograph may belong to the previous tenant.

Record verbal assurances as questions needing written confirmation. “The last tenant fried food here” becomes: “Please provide the relevant approval and extraction information for the cooking described in our operating brief.” Avoid recording an agent's statement as a technical conclusion.

Ask your lawyer which documents must be provided, by whom and when under the applicable rules. Do not apply another state's disclosure requirements or assume every hospitality lease is covered by retail leasing legislation.

Check permitted use and public approvals separately

The lease's permitted use describes a contractual arrangement with the landlord. Planning, building, food-business and liquor requirements are separate matters. One confirmation does not answer all of them.

The NSW Small Business Commissioner advises prospective tenants to check their intended business and building works with the local council and obtain legal advice before entering a lease. That is NSW guidance; the applicable approval pathway and leasing law must be checked for the actual premises.

Give the council or relevant authority the address and operating brief. Ask which existing approvals are relevant, whether your proposed changes require further applications and what information is needed to assess them. Seek written references that your advisers can review.

Include outdoor seating, signage, deliveries, waste collections and proposed hours. A workable dining room can still be a poor fit if the business depends on an activity that has not been confirmed. Do not advertise an opening date on the strength of an application being lodged.

Confirm capacity with the right people

A useful technical inspection answers whether the proposed operation can work and what remains to be designed, approved or priced. It does not ask staff to open electrical equipment or test unfamiliar services themselves.

Ask appropriately qualified advisers to assess relevant matters such as electrical supply and connected load, cooking ventilation, gas arrangements where proposed, water supply, hot water, drainage and trade-waste treatment. Provide an equipment schedule with actual specifications where available.

Have building and access advisers assess the proposed layout, amenities, circulation and any required works. Do not interpret an existing ramp, toilet sign or previous hospitality use as certification for your new layout.

Record each assessment's assumptions. A response based on a small sandwich menu may be invalid after you add fryers, a dishwasher and evening functions. Mark changes to the operating brief and ask affected advisers to reassess them before the decision is final.

Establish what is included and who owns it

Walk through the site with an inventory. Identify fixtures, appliances, furniture, meters, keys, access devices and any shared equipment. Match the inventory to the documents your lawyer is reviewing.

For each significant item, ask who owns it, whether you may use it, its documented condition and who is responsible for servicing, repair and replacement. Photograph visible condition with permission and retain dated reports. A working appliance during a viewing says little about its maintenance history or suitability for your menu.

Shared assets need particular attention. A grease arrestor may serve several tenancies, while its location or servicing access sits outside your leased area. Ask the wastewater provider, landlord and contractor to clarify the arrangement. Do not assume a lease clause alone settles regulatory responsibility.

Keep questions about ongoing records in the venue documents checklist. At this stage, your task is to establish what you would inherit and what you would need to resolve.

Build a complete occupancy-cost view

Ask your accountant to review the proposed financial commitment alongside the lease advice. Separate recurring occupancy costs, upfront payments, fit-out works and eventual exit obligations. Use quotes and written terms wherever possible, and label estimates clearly.

Your working list may include rent, applicable outgoings, security arrangements, legal and professional fees, service connections, required works, insurance and maintenance responsibilities. Ask the lawyer to explain rent reviews, options, guarantees, assignment provisions and make-good obligations in the actual documents.

Do not calculate affordability from the first advertised rent alone. Show the timing of payments, the effect of delayed trading and the cash needed while approvals or works remain incomplete. An incentive can help cash timing without removing an expensive underlying obligation.

Avoid placing invented upgrade allowances against unresolved technical items. “Extraction cost unknown; written assessment required” is more useful than a reassuring number with no basis. The owner needs to see uncertainty before committing funds elsewhere.

Put works and dependencies on one timeline

List each required work package, who commissions it, who pays, necessary approvals and the evidence needed before the next step. Include access for contractors and any restrictions on working hours or use of shared areas.

Distinguish the intended trading date from contractual dates. Ask your lawyer to explain when obligations start and what the documents say about delayed access, incomplete landlord works or unsuccessful approvals. Negotiate through qualified advice; this article does not provide conditional-lease wording.

For planning, work backwards from a realistic completion sequence. Equipment installation may depend on services; testing may depend on installation; opening readiness depends on more than delivery of the keys. Flag tasks that cannot yet be dated and explain the consequence of that uncertainty.

Compare sites using evidence, not enthusiasm

Consider two hypothetical premises. Site A has lower advertised rent and an attractive frontage, but extraction suitability has not been established. Site B costs more each month and has documented services that an adviser is assessing against the proposed menu.

Neither site automatically wins. Site A may become workable after assessment and negotiation, while Site B may have lease conditions or access constraints that outweigh its apparent advantage. The comparison should expose the unresolved decisions rather than award points for appearance.

Use a short decision record for each site:

  • Operational fit: Which essential activities are supported, restricted or unconfirmed?
  • Evidence quality: Which conclusions have written professional or authority support?
  • Cost exposure: Which amounts are quoted, estimated or still unknown?
  • Timing: Which dependencies could delay trading while payments continue?
  • Decision owner: Who must resolve each remaining item before commitment?

If one essential activity remains unconfirmed, do not let a high overall score disguise it. A pleasant dining room does not offset an unresolved requirement that prevents the proposed kitchen from operating.

Run a go, negotiate or stop meeting

Bring the owner and relevant legal, financial and technical advisers together around the same evidence register. Review unresolved items individually. Record the advice, the owner responsible for action and the next decision date.

“Go” means the owner has the information and advice needed to make an informed commitment, subject to the actual transaction documents. It is not a promise that the venue will succeed. “Negotiate” means a material condition, responsibility or cost needs resolution. “Stop” means the proposed use or exposure is unacceptable on the evidence available.

Avoid closing issues with “should be fine”. Use a document reference, an agreed action or a clear statement that the question remains open. Keep earlier versions so you can see what changed between the viewing and the signing decision.

Before signing, check that the final documents match what was assessed. A changed plan, deleted inclusion or different commencement date can alter the decision even when the address and headline rent are unchanged.

Your next action

Choose one prospective site and create its evidence register today. Start with the three questions most likely to change your decision: permission for the proposed use, technical feasibility and the full financial commitment. Send each question to the person qualified to answer it.

The practical Australian café opening guide supports the broader planning sequence. Later, the free Venue Opening Checklist can help establish an opening routine. Neither replaces premises due diligence or legal advice.

References

Source review date: 5 September 2026. General operational information only; obtain advice for your jurisdiction, transaction and premises.

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