A signed lease is a victory. It’s the start of your next location.

But for many franchise owners in Ontario, the lease is also where the most expensive construction mistakes are born.

If you view the lease as a legal document and the build-out as a construction document, you are missing the connective tissue that determines your actual project cost.

The Gap Between "As-Is" and Brand Standards

Landlords in the GTA often hand over a shell and call it "ready for tenant improvements."

But their definition of ready and your franchisor’s definition of ready are rarely the same. If the electrical service is only 200 amps and your kitchen equipment requires 400, that upgrade is now your problem.

If the HVAC tonnage is insufficient for the heat load of your ovens and thirty customers, you are the one writing the check for a new rooftop unit.

The Three Hidden Costs of a Bad Handover

In a commercial build, what you don't know will always cost you more than what you do know.

1. The Utility Shortfall

Checking for "water and power" isn't enough. You need to verify the specific capacity. Upgrading a water line under a Toronto sidewalk requires city permits, street cuts, and a budget that can easily hit five figures before you’ve even painted a wall.

2. The Structural Surprise

If your brand requires heavy equipment or specific venting, the existing roof structure may not support it. If you didn't negotiate structural reinforcements into the landlord's work, you are now paying to fix their building so you can run your business.

3. The "Base Building" Definition

If a pipe leaks behind the wall during construction, who pays? If the definition of "Base Building" is vague, the landlord will point at you. You want a clear line of separation between their infrastructure and your improvements.

Thinking Like a Multi-Unit Operator

An experienced operator doesn't just look at the rent per square foot. They look at the total cost of occupancy, which includes the upfront capital required to make the space functional.

Before the lease is final, you need a site audit that goes beyond a walkthrough.

• Mechanical Audit: Can the existing HVAC handle the load?

• Electrical Audit: Is the panel capacity sufficient for the brand's spec?

• Plumbing Audit: Are the drains where you need them, or are you trenching through concrete on your dime?

Leverage the Work Letter

The "Work Letter" in your lease is your best friend or your worst enemy.

This is where you define exactly what the landlord provides. If you know you need a specific grease interceptor or a certain electrical load, get it into the landlord's scope or negotiate a higher Tenant Improvement (TI) allowance to cover it.

Once the lease is signed, your leverage disappears.

The ROI of Due Diligence

Spending $2,000 on a professional site review before signing a five-year lease can save you $50,000 in unexpected change orders.

In construction, a change order is a reactive expense. In a lease negotiation, that same item is a proactive investment.

If you would like a professional site audit before you sign your next lease, you can reach out to us and schedule a conversation.