First take a look at your existing lease to make sure you didn't agree to any sort of exclusive.
Next consider how the existing business is doing financially and what the potential is for restaurant sales in the area. In other words, if this is a small trade area there may not be sufficient volume available to support two chicken restaurants. The end result could be that you end up with two closed chicken restaurants.
Which tenant is stronger....from both a financial and concept standpoint? In other words, if you had to choose just one of them, which would it be? Issues like: how long existing tenant's lease is; rents generated; strength of lease guarantee; etc. come into play.
Once you have details on the new restaurant, sit down with existing operator and find out if the addition of another chicken operation is going to be a problem....my guess is that he will initially object so you will need to explain about the menu differences, etc.
In the end, if you are confident that they new chicken place will be a good, long term tenant capable of sustained success and is a tenant that you would pick over your existing restaurant go ahead and make the deal.....particularly if the existing restaurant doesn't have much time remaining on their lease.
Oct 22, 2010