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Q: What budget is required to lease a restaurant in China?

Hi,

My friend and I are planning for a restaurant/bar business in Chongqing.
We still have a hard time figuring out the amount of budget for a lease in the City Centre.

 

Thanks in advance for your reply

10 years 33 weeks ago in  Business & Jobs - China

 
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Posts: 3844

Emperor

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is your friend an ex-pat or Chinese? If an ex-pat you should try to find a trusted local partner. An American friend tried to go down the solo route and ended up paying more for the privilege. A local partner would have more access to the connections you will need. I'm not saying it is not possible, just more difficult as a solo ex-pat venture, and i know this doesn't answer your question directly.

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10 years 33 weeks ago
 
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10 years 33 weeks ago
 
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The guides that Happy Expat have provided are a sound indication of basic investment. However, I would advise that you don't lose sight of one other critical factor. Though it's a worldwide problem, malicious claims are particularly prevalent in China and foreign owned businesses can be a prime target because of the lack of basic governmental protection.

 

You would be a food service outlet. There are those in society that will claim the food you have served has made them ill or caused injury to them in one way or another. The problem you will be faced with is the onus is YOU and YOU ALONE to prove that it was not the food you served that gave rise to the problem. It is an expensive procedure requiring input from experts, laboratory testing, supplier compliance data etc. If you cannot make a satisfactory defence, then you will be deemed liable. It is most likely you would opt for out of court settlement but that, in turn, will line you up as a soft target. Others will then try. Your business will only support a finite number of such claims and your bottom line will be eaten away very quickly.

 

I am in the food business and I have read cases in China where parents have even force fed their children toxic substances to induce vomitting and diarrhoea in order to make malicious claims. Large companies like Nestle, Danone and many fast food chains have safeguards in place to deal with this very problem. You can take out liability insurance but the premiums are very high and you must prove that you have tight food safety controls in place to obtain the policies.

 

Don't take malicious claims lightly. It can be a big factor in your company risk assessment plan.

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10 years 33 weeks ago
 
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Governor

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Well, I guess if the city is fraught with rampant wrongdoing, then I should get malicious too. 
As for local rental in the city center, would you please give me a ballpark figure?
How much minimum?
 

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10 years 33 weeks ago
 
Posts: 1198

Shifu

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depending on the city....

 

shanghai or beijing where a normal apartment already cost 5-20k not in the center than you can imagine how much a good location will cost

maybe a 200m2 location: 30-50k a month for rent?

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Because of the licencing requirements for this type of business, I guess you will be looking at 100K to 150K USD registered capital. There are too many variables connected with renting property in China to give an anything like accurate estimate of costs. Presumably, you are looking at locating this type of business downtown so you would be looking at higher bands of commercial property in Chongqing. You would be advised to ask a Chinese friend to search such information.

dom87:

i just know if you wanna open a "food business" you have to have an investment capital of 500k RMB

but i dont know if a restaurant is food business or something special

10 years 33 weeks ago
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