Most of the money in a food buildout is decided before anyone draws anything. It is decided the day you sign, because the unit either has what a commercial kitchen needs or it does not, and everything it lacks becomes a line on your budget.
We have been brought into projects where the operator had already signed and the honest answer was that the space could not do what they wanted at a price they were willing to pay. That conversation is much cheaper in week one than in month four.
Why the unit decides the budget
A commercial kitchen is a services problem before it is a design problem. It needs gas at sufficient volume, electrical capacity, water, sanitary drainage with grease separation, a ventilation path to the roof, and a structure that can carry rooftop equipment.
A space that already has all of that — a former restaurant, in other words — starts you a long way down the road. A space that has none of it is not cheaper because the rent is lower. You are paying for those services either way. The only question is whether you pay the previous tenant for them through rent, or a contractor for them through capital.
This is why per-square-foot rules of thumb are close to useless at the lease stage. The same 2,000 square feet can be a modest fit-out or a gut job depending entirely on what is already in the walls.
Before you view anything
Confirm the zoning permits your use. Not “restaurants generally” — your specific use, in that specific unit, under the current by-law. Municipal planning departments will answer this. If the unit was previously retail, office or industrial, you are looking at a change of use, and that is not a formality.
A change of use typically pulls occupant load, exiting, washroom fixture counts, barrier-free access and fire separation into scope. Those are not cosmetic items, they can add materially to both budget and schedule, and they are not negotiable with the building department.
Pull the permit history. It is public information and it is the single most useful thing you can do before committing. What you are looking for is work done without a permit — a mezzanine, a washroom, a demising wall, a mechanical change. Unpermitted work does not quietly disappear. It surfaces during your review and becomes your obligation to correct, on your schedule and your budget.
Look at what is above and beside you. Residential above a restaurant changes your noise, odour and exhaust obligations. A shared demising wall with a quiet neighbour changes what hours you can run equipment. These are rarely dealbreakers. They are always cost.
What to check on site
Walk the unit with someone who knows what they are looking at. If that is not you, bring someone. This is what we actually check:
| What | Why it matters |
|---|---|
| Gas service size and location | An undersized service caps your cooking line. Upsizing involves the utility, not just a contractor. |
| Electrical capacity and free panel spaces | Refrigeration, cooking, HVAC and lighting add up quickly. A full panel means a service upgrade. |
| Ceiling height and structure above | Hood, ductwork, sprinklers and mechanical all live up there. Low clearance is a real constraint. |
| Roof access and structural capacity | Exhaust fans, make-up air units and HVAC sit on the roof. The roof has to carry them. |
| Sanitary drain location and depth | Floor drains, grease interceptor and equipment drainage all depend on where the stack is. |
| Existing grease interceptor | If there is one — is it sized for your menu, and can it actually be serviced? |
| Water service size | Fixture count, dish machine and any steam equipment drive demand. |
| Washrooms | Count, location, and whether they meet current barrier-free requirements. |
| Loading and waste | Where deliveries land, where garbage and grease go, and whether the landlord permits it. |
| Make-up air path | Exhaust without tempered replacement air does not work. There has to be a route. |
The item that surprises operators most often is make-up air. A hood pulling air out of a sealed room needs an equivalent volume of conditioned air coming back in, and there has to be somewhere for it to come from. In a mid-block unit with no exterior wall access, that gets expensive.
The lease clauses that actually cost money
Rent is the number everyone negotiates. It is rarely the number that decides whether the project works.
Fixturing period. The rent-free window between taking possession and opening. If you get sixty days and your permit alone takes eight weeks, you are paying rent on an empty room through the entire build. Ask for a fixturing period that begins on permit issuance rather than possession, or one long enough to absorb a realistic approval timeline.
Landlord’s work versus tenant’s work. Get it in writing, itemised. “Base building condition” means different things to different landlords. Establish explicitly who is responsible for bringing gas to the unit, upgrading the electrical service, roof penetrations and structural reinforcement.
Roof rights. You need to put equipment on the roof and penetrate it. Confirm you are permitted to, who performs the work, whose roofer must do the flashing, and what it does to the roof warranty.
Exclusivity. In a plaza or mall, a clause preventing the landlord from leasing to a directly competing concept is worth real money — and it is far easier to get before you sign than after.
Assignment and subletting. If the concept does not work, your ability to assign the lease is your exit. A lease that makes assignment conditional on landlord consent with no reasonableness standard is a trap.
Demolition and relocation clauses. Uncommon, but they exist, and they can end a business that has just spent six figures on a fit-out. Read for them specifically.
Restoration obligations. What you must return the space to at the end of the term. An obligation to strip out the entire kitchen and restore to base building is a substantial future liability that almost nobody prices at signing.
Questions worth asking the landlord
- What is the incoming gas service size, and how much of it is allocated to this unit?
- What is the electrical service, and how much is available to me?
- Has the unit ever operated as a food premises? If so, when, and under what permit?
- Are there outstanding work orders, deficiencies or open permits on the property?
- Who is responsible for the grease interceptor, and when was it last serviced?
- Can I put equipment on the roof, and who must perform the penetration?
- What is the fixturing period, and does it start at possession or at permit issuance?
- Will you provide a copy of the base building drawings?
That last one matters more than it sounds. Drawings save weeks. Their absence does not mean the space is bad, but it does mean more site investigation, and it means your designer is working from measurement rather than record.
Red flags
None of these are automatic refusals. All of them mean price it carefully before committing.
- No gas service, and a menu that needs it. Bringing in new gas involves the utility and a timeline you do not control.
- A previous food tenant who closed quickly. Sometimes that is the operator. Sometimes it is the unit, the venting, the neighbours or the landlord.
- Visible unpermitted alterations. If you can see them on a walkthrough, a reviewer will see them too.
- Second floor or basement with no service access. Equipment has to get in, and someday it has to come out.
- No realistic exhaust route, especially a mid-block unit with residential above.
- A landlord who will not put the work split in writing. Ambiguity always resolves in favour of whoever drafted the lease.
The honest summary
The best space is rarely the cheapest per square foot. It is the one where the building already does most of what your business needs, the zoning already permits it, and the lease gives you enough time to build without paying rent on an empty room.
If you are weighing two units, the gap in fit-out cost between them is frequently larger than a year of the rent difference. That is the comparison worth doing before you sign, and it is worth doing with drawings-level judgement rather than a walkthrough impression.
We do this review as part of the free consultation, and we will tell you when a space does not work.
