if you know someone who got sick from eat nothing a restaurant you will probably never go there. that's the fastest way to go out of business. >> at the bottom of our page i have a note about experts. you or anyone, really. cannot be an expert in all fields. if people call me and say, what do i need to open a restaurant in san francisco, when they ask i know they really need help. they need expert help because they can't bottom trained architects or engineers or contractors or familiar with this massive building code. they need to hire an expert. don't try to become an expert. hire people are experts who have the experience how to get through the permitting process and know the regulations and

rules. only if you do a small remodeling if your house if you are not stay at what you are good at. cooking or dentistry. don't become an expert in construction and architect. i sigh that as a problem. people go beyond their levels of ability. >> the next page the permits and licenses required. building permites required for construction. building code says you need a permit for everything except gut sxers down spouts and wall paper. you need a permit for most other things. you need plan review permitting. when you come and pay a large fee for us to review your plans before you get your permits. the street use permit. public works street mapping where the dumpster goes.

issue permits for construction work taking place in the public rieft way. fire sprinkler permits get reviewed by fire departments. signs have a separate requirement under the planning and building code. although they are usually included with the building perm permit. if someone wants a restaurant design the sign acknowledges part of the over all permit otherwise it's separate. and lek signs have different permit requirements. additional licenses include those that the contractor needs to build including his contractor's license and his city business license to run a restaurant you need a bunch of

licenses. a city business license. health department issues -- is it a what is the health department issue, do you know off hand? >> they issue a permit. required to have one owner or manager certified in food safety. actually prefer that you have multiple. i think it's in your interest to have multiple. and you pay a fee and that annual fee supports them coming in and doing what it scheduled to be quarterly inspections. and they will go through and the emphasis of the inspections is food sachlt temperature and microbiological safety. i worked in many cities in this country and never worked in a city where the relationship between the restaurant community and the department of public health is as good as it is here. i think the inspectors come in and make every effort to help

the restaurateur understand the violation and how to address that violation. they try to help them avoid getting a low score or come back quickly in order to verify that the score has gone up and the food is in a safer mode. in general, the restaurant community preeshths the relationship with the public health and work to maintain that. >> let's look at this hand out the draft from the small business restaurant task force. opening a restaurant, 10 tips. first tip about seek advice -- is what we are talking about. it's basically developing a team as i see it. you really need people who will give you expert advice. is that the intension? >> i think the intension is

most restaurateurs are confident people they will put their food and reputation on the line and serve the public. it's like going to the movie theatre everyone has an opinion about the quality of the meal. you are putting yourself out there the self confidence can lend itself to arrogance when you are geth help from people on things they're not gooda. seek advice. if you are not good at construction you find someone to help you or have a contractor look at the space they can look at the electric panel and tell you a typical restaurant needs 400asms and you have toup grade your panel and knows the waiting list for the panel is 6-8 months so you should start that today if you are series about the project. the goal is to have help you go through the process as you go through. goal of the task force is not to

have anybody with a big financial surprise at the end where they forgot a step and it cost a lot of money. >> who would be part of this? you have the contractor. what other advice might you need. would you be seeking? >> i think you could find somebody who is familiar with the zoning requirements. find out if you need a change in use permit. if you need an entertainment permit. if you are in a redevelopment zone they may be a problem. and to look at building and the thingsure not good on the and generally the contractor could help you. you could have the architect or designer early so they can give you an idea how much it will cost. typically they can say if i turn

this room to a restaurant you need 300 square foot based on the size you have in your budget. that information to help get them started so it's not a surprise later. >> i encourage people to get an architect involved early o. i see architectural problems that could be resolved my not renovating the space or starting out by saying, we need to have a second exit and that will take a lot of square footage, here's how you might solve it. the architectural problems are significant time and money issues. okay. tip 2, develop an effective business plan. how does one develop a business plan? what is a business plan? >> i business plan should have a financial component for construction and preopening. have a financial component what you expect your profit and loss

statement to look like. many have that experience those wlo don't there are on line tools to do that. the thing underestimate indeed opening a restaurant is the business plan should have a marketing plan about how you are going to traeshth different market segments and customers to your restaurant. if you are in a neighborhood and you open did you think about take out? did you think about an early bird dinner for people who can't afford rour regular fair and can at 4 or 6 in the afternoon. you look at the marketplace and develop a strategy to encourage them to come to your business. in my experience that's what separates the people who are effective coming out the gate and those who struggle -- simple things like working at the loeshgz, buying a counter and

going to the loeshgz 3 or 4 different day parts and spending time counting how many people walk across the front door. you get an idea of foot traffic and get a sense of, will i have the foot traffic to support my restaurant. >> tip 3, check the zoning requirements, can you have a restaurant here? what type of restaurant? take out? the city has many requirements. you don't want to get tide up in a conditional use or tied up in a neighborhood disagreement they are difficult to resolve. i want to mention while we are trying to check the zoning and planning about historic buildings. a special interest of mine. san francisco is filled with wonderful old buildings that add to the character of the city and many restaurants are put in older buildings.

when you impact the older building people get very upset. we have alternatives in the california historical building code. and the california historical building code superseeds the regular building code. for example, you don't have to make the front door of the restaurant fully compliant with the ada or the california title 24. this is an example. you my meet the california historical building code in a qualified historic building by having a door that is 31 inches wide instead of 32 inches wide. and may have a power door operator, keep everybody happy and preserve the facade of the building and save money. i encourage to you think about the historic building code and the values we are trying to save. >> 4, select a location already zoned as a legally permitted

restaurant. not just zoned but was a restaurant once upon a time. it's so much easier. the utilities, gas, power. power is a problem. we mentioned that a couple of times. getting powers and gas pg and e has a big backlog. now in san francisco we are seeing restaurants and other businesses opening with temporary generators pending the final connections by bg and e. building and fire have a separate process before the builteding application you make a request and pay a fee. not large fee. and say this is our proposal and here's questions we have. we will give you a response in writing you can take to the bank. yes, you need 2 exits or no you don't need 2 exits and yes, you

need fire sprinklers it's good to have a preapplication meeting with fire. if you are far enough along in your space and architect and designers so you know what the questions will be. this is not a general discussion. here are the issues we would like to address. we're happy to do that and 586139 is the number to call. >> there is a cost. preapplication meetings, you know how much? >> 300. 350 dollars? something like that a few hundred dollars. >> tip 6. work with a real estate attorney and contractor when negotiating the lees or purchasing a business much this is part of developing a team. we had a talk with real estate

gp development people doing the not very nice way of saying it, flipping buildings in san francisco. purchasing buildings, improving them and selling them. some ask, why does it take me 8 months and they do it in 3 months? what's the difference? the difference it turned out on lengthy discussion is they have a team, they know what they are doing. they know how to get a permit. they got the plans prepared in a week. have the contractor move in and out and have a team together and know exactly what they will do. the closer you get to a team we everyone has a shared goal and knows what's going on and making money the happyier your project will be. that team includes your real estate attorney and your contractor and architect and your people who will run the

restaurant should be part of that team early on. >> the thought to the lease negotiation and geth a real estate professional or attorney involve side if you are going to take a space which is empty and basically renovate it and make it into a restaurant you will spend capital to make space better and productive. you should get ti's back fwrt landlord. >> what do you mean ti's. >> tenant improvements where they give you a credit against your rent for a period of time. if you have 3 months to go through the permitting process you maybe able to negotiate a lease of 5-10 years and get the first 6 months of rent free while you are investing money in someone els property. when you walk away from the lease what's nailed down becomes the landlord's property.

we suggest you get someone on your team that can help you look at industry standards so the landlord will contribute and lower or costs down. there are leases where the landlord wants the project like in a condo they will start rent the day you open the restaurant with a large general parameter. it must be within 9 months or a year so you are protects and you don't write a check for rent when you have no revenue coming in because your business is not open. you can do that in the lease with someone who is good at that. >> tip 7. have a transferrable lease. getting somebody experts in lease -- >> people -- there are easier ways to making a living than opening the restaurant. long hours and margins are thin

if you love the business it's in your blood and you want to do it. most people opening the restaraunt will be the operator. you get married, have twins, life changes you have a grandparent move in with you and the hours with the restaurant are not attractive. this is an option for you to building the possibility of selling your business within your lease and getting your money back out of the project so you are not trapped into the lease. >> tip number 8, do not release your continganceies until all city permitsu are secured. >> this is a clause in the lease saying i have an out. say you open a night club that serves food in a redevelopment zone and can't get an entertainment permit yoir business concept does not work

you can walk away from your project having spent the development money and not build out money. >> complete accurate forms and plans. i have a few comments and i will refer to our other pages, page 2. what level of plans are required? in the middle of the page, item one says sufficient plans submitted without unnecessary information include -- the more you give us the more we will look at. you don't have to give us things that are not required. if you give us extra information we will look at it. don't give us extra information give us what's necessary. what is necessary includes; this is out of the building code, space layout. the use of all the areas have to be shown on plans. you can't have undesignated rooms or areas.

all the disabled access features must be shown. a state law in the state building code. how to gain entrance from the parking to the restaurant. through the restaurant, bathrooms serving the area of remodel or the restaurant. any phones and drinking fountains all have to be shown. structural plans details energy codeup grade r50ir789 have to be detailed the energy codes are strict like disabled access codes. they are turning to the green building codes. we will see new green building requirements for san francisco. now the california energy code fills the space of green building requirements. fire department where you have an occupant load of 50 or more

and the occupant load is not the patrons it's based on the square footage of the restaurant typically 50 square feet per person. if you have 50 or more the fire department wants to see a complete seating plan to make sure exiting is not blocked. of course, we need to see exits. san francisco probably the number one problem that i see that is difficult to resolve is how you get out of the land locked buildings where you have one front street frontage and no back or side entrances which typically mean you need to put a fire corridor. in there was a change in the california building code in january saying where there is a fully sprinklered building the exits have to be separated a third of the diagnal distance. a technicality but it makes a

difference a third degree of the diagonal difference meansure able to have 2 doors on the fall of the building which previously you need half of the distance you couldn't meet. it's possible to use the new code requirement in sprinklered buildings to ease exiting requirements. those need to be shown on plans. not necessary on show electric and plumbing plans. we need to see where the fixtures are located but don't have to see all the plumbing diagrams. we are not interested in finishes. the health department is interested in finishes. >> the dimension one third or one half, how do you measure that is that to the center of the door opening or the center of a pair of doors? is it in a straight line between the 2 openings or go around a structural fixed objects.

>> the question is, how dou measure the diagonal distance it's not an easy question. say we have this is our building plan this is our building here's our door up here. put a pair of doors out here they should be swinging but they are not. here are a couple of doors. the diagonal distance is measured across the longest space. half of the diagonal is how far the exits need to be separated if you have 2. there is one exit here and the second would have to be that far away. there is no way i will fit that into this building. we'll would build a corridor and put a door in the corridor so you go out to the street. if you need a third of the

diagonal distance, now we can probably meet that third diagonal distance by putting another exit in here. possibly. for some people that may help. building code says you measure from the center line of the door. if you have a pair you can chose the operatable looefr that works best. and the question is where you are measuring this distance is it measured in a straight line or around and about? harvey hacker who does architectural work with the city and i think we agree it's measured in a straight line unless it's in a protected area. >> if we are tight on the measurement we can't measure from the 2 closest jams the

center. >> the center. >> even if you miss by 18 inches or a foot. >> you misby 18 inches or a foot. now we come to the section of the code where there are some potential ways to solve problems. if you misby 18 inches we will figure something out. i think we and our new director and our take is let's solve problems like that. not everybody thinks that way, unfortunately. i have to say. it's easier in the government world to say, it's not there so therefore, it's wrong, resubmit it and make it right. i don't like that approach. i like to figure out a way -- may be we can provide an alternative safety measure, another sprinkler head or something. >> as you say if it's a foot and we get turned down at the counter or by the plan checker

what would you suggest would be our next step? >> okay. it's clear your next step is to speak to the senior plan checker or inspector the chief inspector or the director of the department because they have more experience and knowledge are much more able and willing to accept equivalencieequivalen. >> some say they don't want to do it because the plan checker will be mad me. >> what's the number of restaurants that go out of business before they get their own door. >> i have never seen that and i have been in the restaurant business for 30 years, a lot go away quietly and we don't know they failed. the number of 90 percent failures is accurate. in san francisco i think the

number is probably lower than that. partly because you have some institutions here like aliotos and the cliff house that have been in business 80 or a hundred years they skwu the number lower in terms of that sequence. the newer communities the number is the 90 percent range. >> how many are getting rich in the restaurant business. >> compare to high school-baseball players there are millions and there are a couple of thousand that make it to the major leagues and make millions there are many of hundreds of thousands that never make it to pro. there is a handful of restaurants that make a lot of money that are business 7 days a week and are expensive and there are hundreds that pay bills and make a living but don't make a lot of money.

[inaudible]. >> skoemas is on port property. their sales are on public record they dpo 14 million a year in business. if you divide that by everyday it's 40 thousand dollar a day in business. that's the very top of the food chain in san francisco. there are 6 or 7 restaurants that do 10 million a year. they should be profitable if they manage their costs well and the costs are reasonable. with 4,200 health licenses there are 2200 restaurants you are talking about one percent in the upper and the other 99 is not. >> our last item on our top 10 list has to do with developing a schedule for initiating permit applications. we need a list of what they are

and figuring out what order you do them and where your priorities are and may be the cost of them are. what did you have in mind with you talk about a schedule? >> i think for a development project you should have a calendar with a flow chart and have bench marks of what permits you need and you should look at all the permits you need listed in your document and work backwards to see how far in advanced i need to apply. if you have a 2 story building and you need an elevator. i don't know if the current waiting list. the waiting list on an elevator was about 7 months. in fact, we didn't get the elevator in time to open. we had to build an 80 foot ramp in the backside of the building to get people in which was never used but made it accessible to open and would have don bankrupt

with the rent. whatever the things are in the list you went through. you think of all the other things that might be includes and put a time line. better to apply 2 weeks early. >> let's talk about disabled access. this is such a huge issue. first of all, if you are remodeling a commercial space a restaurant or any commercial space and the cost of the work is under what is the current annual threshold then you only have to spend 20 percent of the cost of your work to meet the disabled access requirement. when you are spending 100 thousand dollars on remodel you spend up to 20 thousand dollars on disabled access. now if your building is compliant you don't have to spend anything. the code says what order. what the priority is of how you

spend that 20 percent in section 1134 capital d combepgz number one. the priority is the path of travel to the area of remodel do that first. that includes the front door and the metal hardware and the restrooms and it goes down and gets to the parking. it's almost always you start at the front and work your way back. the area of remodel always has to comply with the disabled access regulation. there was a question here? let's get that. >> the fine point on the cost. 11 119,900. is the 20 percent in addition? >> if that was 119 thousand dollars in construction you have

to spend another 20 percent to meet the disabled access. >> reality is 20 percent more. contract price. >> yeah. you are allowed to deduct the amount includes to do the disabled access work. i'd have to look the specific language in 1134 d how you deduct that. there are certain things that are exempt from disabled access. disabled access is required when you are doing alterations, structu structural repairs or additions. nonstructural repairs does not trigger disabled access under state law. alterations where you change things to disabled access. a n