What drives value here
- Overall floor area and the sales-to-back-of-house ratio rather than pure zoning
- Extract ventilation, grease management and the cost of installing or replacing it
- Covers achievable, outside seating rights and pavement licences
- Premises licence hours and any planning restrictions on class or opening
- Turnover rent provisions, base rent level and what counts as gross turnover
- Tenant fit-out and whether the review clause disregards it
Turnover rents that actually work
Turnover deals fail on definitions. Whether delivery and third-party platform sales are included, whether VAT and service charge come out, how gift vouchers are treated and what the base rent floor is set at can shift the annual bill materially without either party noticing at heads of terms.
Where turnover rents apply, the audit and certification machinery matters as much as the percentage. Loose drafting is expensive for years.
Rent reviews and the fit-out trap
Most well-drafted leases disregard tenant improvements at review, but restaurants sign a surprising number of leases that do not — meaning the operator pays rent on their own kitchen and fit-out. Establishing what is landlord's and what is tenant's, and evidencing it, is often the single biggest saving available.
Renewals and exits
At renewal, the argument is usually term length and break rights rather than rent alone: operators need flexibility, landlords want term certainty. On exit, dilapidations claims for extract removal, floor and drainage reinstatement and full redecoration are routinely capped by the diminution in value of the landlord's reversion.
Common questions
Is restaurant rent valued using Zone A like a shop?
Usually not. Restaurant space is more often valued overall — a rate per square foot across the trading area with allowances for back of house — because trade depends on covers and kitchen capability rather than window frontage. Where a unit could be let to either a retailer or an operator, both approaches may be tested.
Do delivery sales count towards a turnover rent?
It depends entirely on how gross turnover is defined in the lease. Older clauses drafted before delivery platforms often do not deal with it, which leaves room to argue. New leases should say explicitly whether platform sales, and the commission deducted from them, are in or out.
Can my landlord make me remove the kitchen extract at the end?
Only where the lease requires reinstatement and the landlord actually suffers the loss. If the unit is being re-let to another operator who wants the extract, or redeveloped, the Section 18(1) cap will often reduce or extinguish the claim.
Guides for restaurants
- Leisure & F&BProperty advice for leisure and F&B operators — restaurants, bars, cafés, gyms and entertainment: rent reviews, renewals, dilapidations and exits.
- Turnover RentHow turnover rent works in retail and F&B leases: base rent plus a percentage of sales, what counts as turnover, typical percentages and the traps for occupiers.
- Commercial Rent Review SurveyorChartered surveyor acting for tenants at commercial rent review — evidence, negotiation, arbitration and expert determination across the UK and Ireland.
- Commercial Lease RenewalHow commercial lease renewal works for business tenants: protected and contracted-out tenancies, notices, new rent, new terms and interim rent.
- Section 18 ValuationSection 18(1) of the Landlord and Tenant Act 1927 caps dilapidations damages at the diminution in the value of the reversion. How the valuation works.
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