Retail and restaurant space in Vancouver

General information, not tax or legal advice. Rules and rates change, and every situation is different. Talk to your lawyer and accountant before you act on anything here.

Location questions

• Who walks past, when and why? Morning commuters, lunch crowds and evening diners are different businesses.
• Which side of the street gets the foot traffic? End cap or in-line? Corner visibility?
• Who are the neighbours, and which tenants draw the crowds? Co-tenancy has a big effect on a small shop’s sales.
• Parking, transit, patio potential and signage bylaws.

Building questions for restaurants and food

• Venting and exhaust, grease trap, gas, power service and water.
• Zoning for your use, and the permits and health approvals you’ll need.
• Whether a previous restaurant’s equipment stays, and who owns it.
• Hours, noise, garbage and delivery access.

Lease terms that matter in retail

Percentage rent (some retail leases add rent above a sales threshold), exclusive use, radius restrictions, co-tenancy clauses, operating covenants that force you to stay open, fixturing periods for build-out, and assignment rights so you can sell the business. See what’s negotiable.

First steps to open a restaurant in the City of Vancouver

These are the usual approvals, roughly in order. Several run at the same time, and your designer or contractor will handle some of them.

1. Check zoning and the permitted use. Look up the property on the City’s zoning map, and ask for a property research letter to confirm the approved use of the unit. A space that was a café may not be approved for a full-service restaurant with liquor.
2. Development permit, if needed. The City needs a development permit for a change of use, and for a building that has never had a commercial kitchen. It has to be issued before the building permit.
3. Building permit for the tenant improvements. Kitchen exhaust hoods, fire suppression, plumbing and other renovations go through a building permit. The City’s page on building permits for restaurant kitchen ventilation lists the checklists. Trade permits (electrical, plumbing, gas) are separate.
4. Grease interceptor. Metro Vancouver’s Food Sector Grease Interceptor Bylaw requires a correctly sized interceptor connected to the required fixtures, pumped out at least every 90 days.
5. Vancouver Coastal Health plan review and permit. VCH must approve your floor plan before construction starts. You then submit a Food Service Permit application, your menu, a food safety and sanitation plan and a FOODSAFE Level 1 certificate, and an Environmental Health Officer inspects before you open.
6. Business licence. Apply for a City business licence. Building, zoning and health reviews are part of the approval.
7. Liquor licence, if you’ll serve alcohol. The Liquor and Cannabis Regulation Branch (LCRB) issues a Food Primary licence for restaurants with a full kitchen and dining area, or a Liquor Primary licence for bars. The floor plan needs the City’s occupant load stamp.
8. Signs and patio. Every sign and awning on private property needs a sign permit. Sidewalk and private-property patios have their own permits, listed on the City’s commercial business permits page.

Burnaby, Surrey, Richmond, North Vancouver and the other cities each have their own process, permit names and timelines, and food premises in Burnaby and Surrey go to Fraser Health instead of VCH. Check with the city where the space is.

Restaurant building and lease details

• Ventilation and hood exhaust: where the duct can run, whether the landlord allows a roof penetration, and who pays for it.
• Gas capacity: enough supply for your cooking line, or the cost of an upgrade.
• Electrical service: amps and voltage, and whether the panel can take your equipment.
• Grease trap: an existing interceptor may be undersized for your menu.
• Second-generation space: a former restaurant with a hood, walk-in and plumbing in place can save months and a lot of money. Check what stays, who owns it and whether it works.
• Fixturing period and free rent: build-out time without base rent, then free rent once you open. Restaurants usually need more than retail.
• TI allowance: money from the landlord toward the build-out, usually paid after you open and submit invoices and lien releases.
• Exclusive use: keeps the landlord from leasing nearby units in the property to a direct competitor. Define your use broadly enough to cover your menu.
• Patio rights: whether the lease lets you use outdoor space, and who pays for it.
• Hours, odour and noise clauses: check that the lease allows your hours, and what you owe if neighbours complain about smells or noise.
• Demolition and restoration clauses: whether the landlord can end the lease for redevelopment, and whether you must remove your kitchen when you leave.
• Personal guarantee: most landlords ask for one from a new operator. Negotiate a cap or a burn-off after a set time.
• Percentage rent: some leases add rent once sales pass a threshold. Know the threshold and what counts as sales.

Starting out? Read your first commercial space and micro leases.

If the landlord’s lender takes over

Many leases make the tenant’s rights rank behind the landlord’s mortgage. Lenders often ask tenants to sign an agreement covering three things: the lease ranks behind the mortgage, the tenant can stay as long as they aren’t in default even if the lender takes the building, and the tenant will accept a new owner as landlord. The middle part, non-disturbance, is the part that protects you. If your lease has a subordination clause, ask for non-disturbance to go with it, and have your lawyer review it.

Before you tour, read the touring checklist. Before you sign, see tenant improvements and commercial lease rules in BC.