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How to Choose a Restaurant Location

There are two types of restaurants. Those which people visit for sustenance when they’re doing something else, and those which people travel to specifically to dine. Whichever it is that you’re looking to open, choosing a restaurant location isn’t something that can be underestimated.

There’s no perfect formula — if there were, every restaurant would be permanently full, with high-spending guests — but there are various things you should look out for as you narrow down your search.

Choosing the right city

With your first restaurant, the obvious choice is to have it in the same city you’re currently living in. You know the area and you can be on hand to oversee developments. But just because it’s nearby, it doesn’t necessarily mean it’s the most suitable option for your restaurant concept.

What if the perfect opportunity arose in the next state over, or on the other side of the country? Would you be willing to pack up and relocate to realize your dream? It may seem extreme, but in the same way you shouldn’t limit your search for love to just people who happen to live nearby, your hunt for the perfect restaurant shouldn’t be restricted to a short drive from your home.

Choosing the right neighborhood

Within each city or suburb, each neighborhood attracts a different type of demographic and if you know who your restaurant is targeted at — which you should — it’s essential that you look at the data for who lives and visits the various areas under consideration.

What are people’s reasons for being there? If it’s not where they live, are they there on business, out shopping, or enjoying a leisure activity? How your restaurant fits into their life is something you need to think carefully about — here are a few typical restaurant and customer types that you may consider for your own scenario.

Fast Food

Aimed at 15-35-year-olds. Visits are spontaneous and usually part of an activity such as shopping or going to the movies.

Bars and Bistros

For 25-45-year-olds with a significant disposable income. They tend to need somewhere to go to unwind after work.

Casual Dining

Middle-income families with younger children. They’ll want somewhere clean, safe, and easy to get in and out of.

Fine Dining

Frequented by over the over 35 set, higher-income couples, and business professionals who will often expect onsite (or valet) parking.

Choosing the right street

Digging deeper into the restaurant location you’ve picked, each street will have its own characteristics that may or may not suit your restaurant. Commercial realtors will be able to help with your research, but you should also speak to other business owners (both restaurants and other types of retailers) about the type of customers that visit them.

What are the busy times of day?
What are the busy months of the year?
How would they describe the average customer?
How far have they travelled?
How did they get there?
Are they on their own or with others?

If your restaurant relies on a lot of passing trade, such as a takeout cafe might, look at streets that are natural routes to and from transport hubs. Visit them during the morning and evening rush hours and see where the majority of people are coming from.

Can you set yourself up somewhere your average customer will naturally be passing and become a fundamental part of their day? And don’t forget to consider which side of the street sees more traffic. It can be surprising.

Choosing the right building

Even if you’re on the right street, being just a few shopfronts in the right or wrong direction can have a huge impact on your success.

The more you pinpoint your search, the less control you have over the choice of buildings open to you. Even if you’re constructing something from scratch, you still need land to be available in the spot you have in mind.

You need a checklist when you’re searching to mark down the definite prerequisites and the nice-to-haves. If somewhere ticks seven out of your ten criteria, it may be worth taking it if there’s not a high turnover of properties, rather than waiting for the perfect opportunity.

“Tenants may be asked to cover far more than they ever realized in the cost of their restaurant lease, so it’s important to detail exactly what they’ll be paying for.”

What to Look for in a Commercial Real Estate Lease »

There’s a definite charm in finding a building full of character to convert into a thriving restaurant, however, the quirks that give it that edge may create some huge impracticalities when it comes to service time. If a property has been a restaurant before, it’s far easier to jump through the various hoops of securing a business license, liquor license, signage permits, and all the other basic requirements that every restaurant needs.

It’s worth considering that if a ready-made restaurant premises is available, someone may have failed there before. If this has happened time and time again, people may start perceiving the space rather than the restaurant itself negatively. You may think you’ll be the one to buck the trend, but you should look closely at the history of any building so you can avoid the same mistakes that have been made before.

A good restaurant location is never going to be a replacement for good food, but it can certainly help get you up and running.

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