How to negotiate a longer rent-free period for your F&B lease

The scale of this is not hypothetical. In the first ten months of 2025 alone, 2,431 F&B outlets in Singapore closed — and according to figures released to Parliament by Deputy Prime Minister Gan Kim Yong, 82% of the outlets under five years old had never posted a profit. A tight rent-free period is not the only cause of an early failure, but it is one of the earliest — and most negotiable — mistakes an operator can lock in.

Why one month is usually not enough

In Singapore, many landlords still start by offering a standard one-month rent-free period. For a simple retail unit or office, that may sometimes be manageable. But for F&B, it is usually very tight.

F&B fit-outs are more complicated. You are not just putting up shelves and furniture. You are dealing with kitchen exhaust, grease traps, water points, gas, electrical loading, floor traps, drainage, fire safety requirements, waterproofing, cold rooms, equipment delivery, and SFA licensing requirements.

Even if your contractor promises you that renovation can be completed within four weeks, that does not mean your business can open within four weeks. Completion of renovation and approval to operate are two very different things. This is where many operators get caught.

Renovation delays are very common

Most operators do not budget enough time for renovation delays. I have seen this happen many times, especially when the unit is older, previously used for a different concept, or not properly checked before signing.

For example, the power supply may look sufficient at first glance, but after your kitchen consultant does the actual equipment schedule, you realise the unit cannot support your full load. Suddenly, you need to apply for an electrical upgrade, speak to the landlord, check capacity, wait for approvals, and potentially revise your kitchen layout.

Drainage is another common issue. A unit may have existing floor traps, but they may not be positioned where your kitchen needs them. Moving or adding drainage points can be difficult, especially in malls or older buildings where coring through the slab is restricted.

Exhaust and ducting are another. Some units may have an existing exhaust provision, but the capacity may not be suitable for your cooking style. A cafe doing light food preparation and a restaurant doing heavy wok cooking have very different requirements. If the exhaust is insufficient, you may need additional works to satisfy the authorities, secure landlord approval, or even change your cooking method. All of this takes time.

These are not small inconveniences. They can delay your opening by weeks — or worse, months.

Licensing delays can hurt even more

Renovation delays are one thing. Licensing delays are another. For F&B operators, SFA approval is one of the most important steps before opening. Many operators assume that once renovation is done, approval will be straightforward. Unfortunately, that is not always the case.

SFA inspections can fail because of non-compliance with regulations. The handwash basin may not be in the correct location, there may be insufficient separation between raw and cooked food preparation areas, finishes may not be acceptable, or certain food preparation areas may not meet hygiene requirements. Even seemingly small issues can delay approval because rectification works need to be done before a re-inspection.

URA Change of Use can also create problems. If a unit was previously approved for retail use and the incoming tenant wants to operate as a restaurant, the change of use application may be rejected or delayed if the premises do not have the correct planning approval, if there are concerns over parking, traffic, exhaust, or nuisance, or if the use does not align with the approved zoning or building use. If you require a late liquor licence beyond midnight, or want to have a live band, there are specific permissions that you need — and they may not always be granted.

The frustrating part is that these issues may not always be obvious at the start. By the time you discover them, your rent-free period may already be over.

What you should ask for instead

As a general rule, F&B tenants should try to negotiate for at least 6 to 8 weeks of rent-free period. For larger units, more complicated concepts, or heavy kitchen fit-outs, it is not unreasonable to ask for 10 to 12 weeks. Not every landlord will agree, but you should at least make the request properly and justify it clearly.

The key is not to simply ask for more rent-free period for the sake of asking. You need to explain why it is needed. Tell the landlord that your renovation and fitting-out works are more complex than a typical retail fit-out. Explain that you need time for kitchen equipment installation, M&E coordination, authority submissions, SFA inspection, and possible rectification works. If your concept requires more technical works, say so upfront.

A reasonable landlord will understand that an F&B tenant cannot trade until the unit is properly fitted out and licensed. It is also in the landlord’s interest for you to open properly, not rush into mistakes and struggle later.

Do not rush your handover

Another important point: do not rush your handover date just because you are excited to take the unit. It is only to the landlord’s benefit if you take over quickly.

I know it is tempting. Once you find a good location, you want to move fast. But if you take over too early without your design, consultants, contractors, equipment schedule, and licensing plan properly lined up, you are just burning your own rent-free period.

Try to set the handover date as far back as the landlord will reasonably allow. Use that time before handover to finalise your layout, speak to your contractor, confirm your equipment list, check power supply, and prepare your licence applications. A rushed handover usually means you are unprepared. And when you are unprepared, mistakes become expensive.

Be prepared to walk away

This may sound harsh, but if the landlord refuses to give anything beyond the typical one-month rent-free period, you need to seriously consider whether the deal is worth it. A short rent-free period may look like a small issue during negotiation, but it can become a very costly problem later.

Imagine paying rent for one or two months before opening, while also paying contractors, staff, deposits, equipment suppliers, and licensing costs. That kind of cash flow pressure can affect the business before it even starts. Sometimes, the best decision is to walk away from a unit that does not give you enough time to open properly.

A simple rule of thumb

Use this as a starting point when sizing your request — then adjust upwards for technical complexity or unit condition.

• Simple cafe or light refreshment concept — at least 6 weeks, depending on the condition of the unit.

• Restaurant with a proper kitchen fit-out — 6 to 8 weeks should be requested.

• Large unit or heavy cooking concept — 10 to 12 weeks may be justified.

• Unit requiring change of use or technical upgrades — ask for more time and build in buffers.

What to do next

If you are unsure about the process, speak to your F&B consultant early. They can guide you through the licensing requirements, highlight potential issues, and help ensure your applications are handled properly. Get your real estate agent involved in the rent-free negotiation too — a good F&B leasing specialist will know how to position the request to the landlord and explain why it is reasonable.

The goal is not to be difficult. The goal is to give yourself a realistic runway to open properly. Do not assume one month is enough just because it is what the landlord first offers. Negotiate from the start, justify it properly, plan your handover carefully — and if the terms do not give you enough runway, be prepared to walk away.