Renting a shop in China [CC#3]

Finding a good business location and renting a shop to operate from is an especial challenge in Central China.

Every city, every district, every industry of China has its own idiosyncrasies. Sometimes (as in our case) you rent from a "fangdong" landlord who owns rights to a rental unit. At other times you may deal with a small property management company and lease a "menmian" storefront. Other hybrid scenarios often emerge with countless and ambiguous "ceng" layers of "laoban" bosses taking their own piece of the rental payment pie, which effectively drives rent prices sky high.

No matter what the diligent tenant does, they must sign a "hetong" contract. Absolutely you must consider how you can minimize any security deposits and "zhuanrang fei" transfer fees (cash bribe payments to gain permission to lease). Any cash given up-front should be clearly documented and should be given slowly. The eager entrepreneur often is too loose with the ample cash available during the startup phase. Without a doubt you should negotiate how much your rental fee will increase annually (10-20-30% is common). Additionally ensure you know what penalties exist for early withdrawal. Sadly you can seldom believe what you are told, trust the documents you sign, rely upon the hands that you shake or make claim to the promises over dinner and hearty "ganbei" dry-your-glass toasts when celebrating the new lease signature.

China redefines the game Caveat Emptor - Renter Beware!

Pro-tip if you plan to lease in a shopping complex you may be able to get 6-12-18 months rent free (because the place won't have electricity or customers for 5-11-17 months... which means you won't have any income!)

The day after our Grand Opening party, we "sange pengyou" 3 Amigos didn't have a clue about any of these shenanigans. Except perhaps we did encounter and successfully dodge a 100,000 yuan ($15,000 USD) transfer fee! A feat marvelously executed by Louis!

Louis signing contract in blood... not really it was red ink.

Louis signing contract in blood... not really it was red ink.

The shop we finally rented had two levels and was "yibai pingfangmi" 100 square meters. Before we moved in, the 50 sq.m. below was customer seating with a small restroom on the back left. The front was all glass and about 7 meters wide. About 8 meters back from the center doors was a heavy duty steel staircase, painted black, that ran against the back wall leading upwards with a sharp righthand turn to the second floor.

The second floor was partitioned into 3 functional rooms. Standing at the top of the staircase, the left side was all open seating space with narrow windows beyond over looking the front entrance. To your right was a small enclosed seating area (typically used in China for meetings or "majiang" Majohng table gambling). Beyond the partitioned room, in the far back righthand corner, (also over looking the entryway) was a tiny kitchen with a big steel sink with simple plumbing stolen from the bathroom below. A gigantic vent hood nearly filled the small room to take care of the oily smoke produced from all the heavy "guo" wok frying required in authentic Chinese grub. However the best part of all was a little elevator shaft with rope and pulley assembly for sending food down below to customers below. Sadly we never found a suitable use for elevating our green or roasted coffee beans up and down the wall.

A special feature which enabled us to roast coffee on site was the oversized exhaust pipe running left from the kitchen, into the left dining area and snaking back over the stairway to exit five floors up and out the roof of the hotel behind us. This same hotel provided KTV music for us most evenings through the concrete walls separating our stairwell with one of the many KTV rooms beyond.

The place was really clean (for a former restaurant) and the landlady seemed pleasant enough so we decided to go for it. Paul, Louis and I set off to make ROCC Coffee dreams come to life in the Xianglong Times Plaza.

But those dreams are all part of a "jihua" planning and building "gushi" story which occurred over the 100 days leading up to these Grand Opening Memories.